In the Matter of E-House (China) Enterprise Holdings Limited - Convening Order and and Sanction Order Judgment

¶ IN THE GRAND COURT OF THE CAYMAN ISLANDS FINANCIAL SERVICES DIVISION CAUSE NO: FSD 165 OF 2022 (NSJ) IN THE MATTER OF SECTION 86 OF THE COMPANIES ACT (2022 REVISION) AND IN THE MATTER OF E-HOUSE (CHINA) ENTERPRISE HOLDINGS LIMITED Before: The Hon. Mr Justice Segal Appearances: Mr Nick Herrod, Mr Ryan Hallett and Ms Allegra Crawford of Maples and Calder (Cayman) LLP for the Company Convening hearing: 15 September 2022 Sanction hearing: 9 November 2022 Draft judgment distributed: 10 November 2022 Judgment Delivered: 17 November 2022 HEADNOTE Creditors’ scheme of arrangement pursuant to section 86 of the Companies Act (2022 Revision) – decision at convening hearing and sanction hearing – voting by creditors who are affected by sanctions on Russia – scheme discharging New York law governed debt – availability and effect of relief under chapter 15 of the US Bankruptcy Code and under New York private international law – effect of the scheme under Hong Kong and BVI law 1 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 1 of 55 2022-11-17 FSD2022-0165 Page 1 of 55 2022-11-17 FSD2022-0165 Page 1 of 55 2022-11-17 FSD2022-0165 Page 1 of 55 2022-11-17 Digitally signed by Advance Performance Exponents Inc Date: 2022.11.18 12:01:10 -05:00 Reason: Apex Certified Location: Apex JUDGMENT Introduction 1. In July 2022 E-House (China) Enterprise Holdings Limited (the Company) applied for an order (the Convening Order) giving it permission to convene a single meeting (the Scheme Meeting) of certain of its creditors (all of whom are holders of notes issued by the Company) who were to be parties to a scheme of arrangement under section 86 of the Companies Act (2022 Revision) (the Companies Act) for the purpose of considering and if thought fit approving the scheme. 2. On 28 July 2022, the Company filed a petition seeking the sanction of the proposed scheme and a summons (the Convening Order Summons) pursuant to which it applied for the Convening Order. On 7 September 2022 the Company filed a further summons seeking permission to amend the petition in the manner set out in the amended petition attached to the further summons (the Amended Petition). 3. The Convening Order Summons was heard on 15 September 2022. I was satisfied that it was appropriate to permit the Company to convene a meeting of the creditors to be parties to the scheme, although, as I explain below, I declined to permit the Company to exclude from voting certain creditors affected by sanctions against The Russian Federation (Russia). The Convening Order was made on 20 September 2022. The meeting was to be held on 12 October 2022. I explain below the issues that arose at the convening hearing and my reasons for making the Convening Order. 4. On 4 October 2022 the Company filed a summons (the Scheme Meeting Summons) seeking an urgent order that the date of the meeting be changed to 2 November 2022. The Company, in its evidence in support of the Scheme Meeting Summons, explained that scheme documents had been sent to creditors but the Company had recently found that creditors were taking longer than expected to submit their voting instructions. As a result, the Company considered that creditors should be given more time to submit voting instructions so that as many creditors as 2 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 2 of 55 2022-11-17 FSD2022-0165 Page 2 of 55 2022-11-17 FSD2022-0165 Page 2 of 55 2022-11-17 FSD2022-0165 Page 2 of 55 2022-11-17 FSD2022-0165 Page 2 of 55 2022-11-17 FSD2022-0165 Page 2 of 55 2022-11-17 possible had the opportunity to vote and participate in the meeting. The Company also sought an order that the record date for the meeting be amended and that certain other consequential orders be made (including a direction that it give notice to creditors of the change to the date of the meeting and the other orders made). The Company also filed a Re-Amended Petition (the Re-Amended Petition) which included various minor updating amendments to the Amended Petition. The Company requested that I deal with the Scheme Meeting Summons on the papers without the need for a further hearing. In view of the urgency and subject matter of the Scheme Meeting Summons, I was prepared to do so. On 5 October 2022, I ordered (the Further Convening Order) that the Company had permission to amend and reschedule the date of the meeting to 2 November 2022 and made the necessary consequential orders. I also gave the Company permission to amend the scheme document in the form appended to the Fourth Affirmation of Zhou Liang (Mr Zhou). 5. On 6 October 2022 the Company sent to scheme creditors and published the notice of the date of the reschedule meeting and an update letter explaining the reasons for the change to the date of the meeting, explaining the further proposed amendments to the scheme and providing an update on progress in the restructuring and certain further information which I directed be provided to scheme creditors. 6. The meeting of scheme creditors was held in the Cayman Islands on 2 November 2022 at the offices of the Company’s Cayman Islands attorneys (Maples and Calder). Creditors were able to attend in person or via a Zoom link. Over 93% in value of the notes subject to the scheme attended in person or by proxy and creditors representing 99.96% by value and 99.87% by number voted in favour of the scheme. The scheme therefore achieved the support of a very substantial proportion of affected scheme creditors. 7. On 9 November 2022, the Company’s application for an order sanctioning the scheme was heard. At the end of the hearing I confirmed that I would grant the order sought and that I would subsequently set out in writing, in addition to my reasons for making the Convening Order, my reasons for making the order sanctioning the scheme. This judgment now sets out those reasons. 3 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 3 of 55 2022-11-17 FSD2022-0165 Page 3 of 55 2022-11-17 FSD2022-0165 Page 3 of 55 2022-11-17 FSD2022-0165 Page 3 of 55 2022-11-17 FSD2022-0165 Page 3 of 55 2022-11-17 FSD2022-0165 Page 3 of 55 2022-11-17 FSD2022-0165 Page 3 of 55 2022-11-17 FSD2022-0165 Page 3 of 55 2022-11-17 The evidence 8. The main evidence filed in support of the Convening Order Summons was as follows. The First Affirmation (Zhou 1) of Mr Zhou (who is the Company’s CFO), the Second Affirmation of Mr Zhou (Zhou 2), the Third Affirmation of Mr Zhou (Zhou 3), the First Affidavit of Yeung King Shan Fanny (Ms Yeung) (who is an associate director of D.F. King Limited, the Company’s information agent (the Information Agent)), the Second Affidavit of Ms Yeung, the Affidavit of Edward Lam (Mr Lam) (who is a partner in Skadden, Arps, Slate, Meagher & Flom, the Company’s onshore legal advisers) and the Affidavit of Allan Gropper (Judge Gropper) (who is a well-known and highly respected retired Bankruptcy Judge for the Southern District of New York). Zhou 1 exhibited a copy of the form of explanatory statement (the Explanatory Statement) that the Company proposed to send to the creditors who were to be parties to the proposed scheme. The formal terms of the proposed scheme were set out at Appendix 4 of the Explanatory Statement (the Scheme). 9. The following further evidence was filed in support of the Company’s application for an order sanctioning the scheme. The Fifth Affirmation of Mr Zhou (Zhou 5); the Third Affidavit if Ms Yeung; the First Affidavit of Mr Alexander Lawson (the chairperson at the meeting of scheme creditors); the First Affirmation of Zhang Xing (Zhang 1) (Mr Zhang is an officer of China International Capital Corporation Hong Kong Securities Limited (CICC), the Company’s financial adviser) and the Third Affidavit of Ms Rachel Catherine Baxendale of Maples and Calder. Shortly before the sanction hearing, the Company also filed the Sixth Affirmation of Mr Zhou (Zhou 6). The Company, its financial position, and the notes which are to be subject to the scheme 10. The Company is a holding company. Its shares and notes have been listed on the Hong Kong Stock Exchange (HKSE). Its principal assets are the shares that it holds in its subsidiaries, in 4 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 4 of 55 2022-11-17 FSD2022-0165 Page 4 of 55 2022-11-17 FSD2022-0165 Page 4 of 55 2022-11-17 FSD2022-0165 Page 4 of 55 2022-11-17 FSD2022-0165 Page 4 of 55 2022-11-17 FSD2022-0165 Page 4 of 55 2022-11-17 FSD2022-0165 Page 4 of 55 2022-11-17 FSD2022-0165 Page 4 of 55 2022-11-17 FSD2022-0165 Page 4 of 55 2022-11-17 FSD2022-0165 Page 4 of 55 2022-11-17 particular Fangyou Information Technology Holdings Limited (Fangyou), a company incorporated in the BVI (through which it indirectly owns a number of operating entities including Hong Kong Fangyou Software Technology Company Limited (Hong Kong Fangyou) a company incorporated in Hong Kong), and TM Home Limited (of which the Company owns 70.23%, and which is incorporated in the Cayman Islands and ultimately controls a number of other operating entities). The Company is in the business of real estate agency services, real estate data and consulting services and real estate brokerage network services in the People's Republic of China (PRC), through its indirect operating subsidiaries there (I refer to the Company, its subsidiaries and its indirect subsidiaries as the Group). 11. There are two note issues which are to be subject to the scheme (together the Old Notes). The notes are all governed by New York law: (a). senior notes with an aggregate principal amount of US$298,200,000, a coupon of 7.625% per annum and a maturity date of 18 April 2022 (the 2022 Notes). (b). senior notes with an aggregate principal amount of US$300,000,000, a coupon of 7.60% per annum and a maturity date of 10 December 2023 (the 2023 Notes). 12. The 2022 Notes were listed on the HKSE but were delisted following maturity. The 2023 Notes remain listed on the HKSE but trading was suspended on 19 April 2022. I refer to the holders of the 2022 Notes and the 2023 Notes together as the Noteholders. 13. The Old Notes are held in global form through the Hongkong and Shanghai Banking Corporation Limited (HSBC) acting through its nominee HSBC Nominees (Hong Kong) Limited as common depositary (the Depositary) for the clearing systems (who are identified below). HSBC is the trustee of the Old Notes (the Old Notes Trustee). 14. The Old Notes are guaranteed by certain direct and indirect subsidiaries of the Company (the Subsidiary Guarantors), namely Fangyou , CRIC Holdings Limited (CRIC) (incorporated in the British Virgin Islands), Hong Kong Fangyou and CRIC Holdings (HK) Limited (CRIC Hong Kong) (incorporated in Hong Kong). 5 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 5 of 55 2022-11-17 FSD2022-0165 Page 5 of 55 2022-11-17 FSD2022-0165 Page 5 of 55 2022-11-17 FSD2022-0165 Page 5 of 55 2022-11-17 FSD2022-0165 Page 5 of 55 2022-11-17 FSD2022-0165 Page 5 of 55 2022-11-17 FSD2022-0165 Page 5 of 55 2022-11-17 FSD2022-0165 Page 5 of 55 2022-11-17 FSD2022-0165 Page 5 of 55 2022-11-17 FSD2022-0165 Page 5 of 55 2022-11-17 FSD2022-0165 Page 5 of 55 2022-11-17 FSD2022-0165 Page 5 of 55 2022-11-17 15. The Company has liabilities in addition to those arising under the Old Notes. These include sums owing under a convertible note (the Convertible Note) issued on 4 November 2020 to Alibaba.com Hong Kong Limited (Alibaba) in the principal amount of HK$1,031,900,000 (US$135,000,000). In addition, there are liabilities owed to other members of the Group of RMB 1,423,300,000 (US$223,347,000) and other payables of RMB 12,200,000 (US$1,914,000). 16. The Company's financial position deteriorated in the second half of 2021 and the first half of 2022 as a result of various factors described in Zhou 1, including the downturn in the PRC property market. The Company was unable to repay the principal due on 18 April 2022 in respect of certain of the Old Notes. This default caused a cross-default under the Convertible Note but Alibaba agreed to waive this default subject to certain conditions which included a term that if the Company’s proposed restructuring had not become effective by 31 October 2022 (which was later extended to 15 December 2022), then the waiver would be automatically and immediately revoked and Alibaba would become entitled to enforce the Convertible Note. Despite this waiver, sums remain due and owing under both the 2022 Notes and the 2023 Notes which the Company cannot pay. The Company’s position is that it was therefore cashflow insolvent at the time of the filing of the petition and remains so and that absent the approval of the scheme by Noteholders and the sanction of the scheme by the Court, it was likely to go into insolvent liquidation. 17. According to Mr Zhou, the Company's financial position as at 31 March 2022 can be summarised as follows: (a). it had assets with a net book value of approximately RMB 8,967,000,000 (approximately US$1,407,118,000). It had total liabilities of approximately RMB 5,981,189,000 (approximately US$938,579,000). (b). the value of its assets (valued at book value) exceeded its liabilities. However, a majority of the Company’s assets were not readily realisable and were unlikely to be recoverable in full or, in some instances, at all. 6 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 6 of 55 2022-11-17 FSD2022-0165 Page 6 of 55 2022-11-17 FSD2022-0165 Page 6 of 55 2022-11-17 FSD2022-0165 Page 6 of 55 2022-11-17 FSD2022-0165 Page 6 of 55 2022-11-17 FSD2022-0165 Page 6 of 55 2022-11-17 FSD2022-0165 Page 6 of 55 2022-11-17 FSD2022-0165 Page 6 of 55 2022-11-17 FSD2022-0165 Page 6 of 55 2022-11-17 FSD2022-0165 Page 6 of 55 2022-11-17 FSD2022-0165 Page 6 of 55 2022-11-17 FSD2022-0165 Page 6 of 55 2022-11-17 FSD2022-0165 Page 6 of 55 2022-11-17 FSD2022-0165 Page 6 of 55 2022-11-17 (c). the Company held cash and cash equivalents of approximately RMB13,380,000 (approximately US$2,100,000). (d). the Company was, as noted above, unable to repay the principal sum of US$298,200,000 due on the maturity of the 2022 Notes on 18 April 2022. The failure to pay the amounts due under the 2022 Notes constituted an event of default under the relevant indenture, and as already noted, a cross-default (but without giving rise to an automatic acceleration) under the terms of the Convertible Note, which in turn constituted a cross-default under the 2023 Notes. The default under the Convertible Note has been, as I have also already noted, waived by Alibaba in exchange for the Company entering into various undertakings and agreements. However, the amounts due under the 2022 Notes and the 2023 Notes remain payable and outstanding. 18. As at the date of the Explanatory Statement, the Company’s most recent audited accounts were those for the period ending 31 December 2020, as the audited accounts for 31 December 2021 were still in preparation (see the Explanatory Statement at [2.14(b)]). A copy of the unaudited consolidated financial statements of the Group for the year ended 31 December 2021 and the interim unaudited consolidated financial statements of the Group as at 30 June 2021 were attached in Appendix 8 to the Explanatory Statement and Mr Zhou provided further financial information in Zhou 1 based on and extracted from the Group's unaudited management accounts as at 31 December 2021. Mr Zhou stated that there had been some significant movements in relation to certain assets and liabilities during the period from 1 January 2022 to 31 March 2022 and confirmed that these had been taken into account in the information provided and statements made regarding the Company's financial position in Zhou 1 and that the updated information had been provided to Kroll (HK) Limited (Kroll) for the purpose of its liquidation analysis (which was attached as appendix 3 to the Explanatory Statement). 19. The Explanatory Statement (at [2.14(a)]) also noted that the figures for 31 March 2022 provided in it were based on the Group’s unaudited management accounts as at 31 December 2021 with the necessary amendments to reflect the updated information provided to Kroll. Mr 7 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 7 of 55 2022-11-17 FSD2022-0165 Page 7 of 55 2022-11-17 FSD2022-0165 Page 7 of 55 2022-11-17 FSD2022-0165 Page 7 of 55 2022-11-17 FSD2022-0165 Page 7 of 55 2022-11-17 FSD2022-0165 Page 7 of 55 2022-11-17 FSD2022-0165 Page 7 of 55 2022-11-17 FSD2022-0165 Page 7 of 55 2022-11-17 FSD2022-0165 Page 7 of 55 2022-11-17 FSD2022-0165 Page 7 of 55 2022-11-17 FSD2022-0165 Page 7 of 55 2022-11-17 FSD2022-0165 Page 7 of 55 2022-11-17 FSD2022-0165 Page 7 of 55 2022-11-17 FSD2022-0165 Page 7 of 55 2022-11-17 FSD2022-0165 Page 7 of 55 2022-11-17 FSD2022-0165 Page 7 of 55 2022-11-17 Zhou further confirmed in Zhou 1 that there had been no significant changes to the Company's financial position since these updated figures. He also explained why the Company had been unable to finalise its 2021 and interim 2022 financial statements in time for inclusion in the Explanatory Statement. This, he said, had been primarily due to the fact that the progress in preparing the financial statements of the Group had been negatively affected by the strict COVID-19 prevention and control measures in the PRC, as well as staff turnover within the Group and a change in the Company's auditor. The Company had made announcements in July 2022 and August 2022 on the HKSE regarding the delays in finalising its financial statements and the reasons for the delays. The restructuring negotiations and communications with Noteholders regarding the scheme process in advance of the hearing of the Convening Order Summons 20. The Company has been in discussions for some time regarding how to deal with its financial problems and the terms of a restructuring of the Old Notes. 21. In March 2022, the Company appointed a financial adviser (CICC) to evaluate the capital structure and liquidity position of the Company and its subsidiaries, and to explore options for the restructuring of the Old Notes. 22. On 31 March 2022, the Company announced on the HKSE website the commencement of an offer to exchange the outstanding principal amount of the Old Notes and a solicitation of consents from the Noteholders (the Exchange Offer) which exchange was subject to certain conditions being met, including acceptance of the Exchange Offer by holders of at least 90 per cent of the outstanding principal amount of the Old Notes (the Minimum Acceptance Amount). 23. Given the conditions attached to the Exchange Offer, concurrent with announcement of the Exchange Offer, the Company also invited the Noteholders (through an announcement on the HKSE website) to accede to a restructuring support agreement (the RSA) by 4.00 p.m. London time on 11 April 2022 (the Exchange Expiration Deadline). The Company's announcement also stated that the restructuring may be implemented through a scheme of arrangement if the Exchange Offer was not successfully completed, and provided a copy of the RSA, which 8 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 8 of 55 2022-11-17 FSD2022-0165 Page 8 of 55 2022-11-17 FSD2022-0165 Page 8 of 55 2022-11-17 FSD2022-0165 Page 8 of 55 2022-11-17 FSD2022-0165 Page 8 of 55 2022-11-17 FSD2022-0165 Page 8 of 55 2022-11-17 FSD2022-0165 Page 8 of 55 2022-11-17 FSD2022-0165 Page 8 of 55 2022-11-17 FSD2022-0165 Page 8 of 55 2022-11-17 FSD2022-0165 Page 8 of 55 2022-11-17 FSD2022-0165 Page 8 of 55 2022-11-17 FSD2022-0165 Page 8 of 55 2022-11-17 FSD2022-0165 Page 8 of 55 2022-11-17 FSD2022-0165 Page 8 of 55 2022-11-17 FSD2022-0165 Page 8 of 55 2022-11-17 FSD2022-0165 Page 8 of 55 2022-11-17 FSD2022-0165 Page 8 of 55 2022-11-17 FSD2022-0165 Page 8 of 55 2022-11-17 appended a term sheet setting out the terms of the proposed restructuring (the RSA Term Sheet). 24. On 11 April 2022, the Exchange Expiration Deadline was extended to 4.00pm London time on 13 April 2022 and the Company announced this on the HKSE’s website. 25. On 14 April 2022, the Company announced on that website that it had terminated the Exchange Offer due to the Minimum Acceptance Amount condition not having been satisfied and that it was preparing to implement the restructuring by way of a scheme of arrangement and that therefore it was extending the deadline for accession to the RSA, in accordance with the terms of the RSA, to 4.00 pm London time on 22 April 2022 (the Instruction Fee Deadline). 26. On 5 August 2022, the Company sent a letter to Noteholders (as creditors who would be subject to the scheme). This letter is referred to as the PSL (an abbreviation of practice statement letter). The purpose of the PSL was (as contemplated by [3.1] of the Practice Direction No 2 of 2010 (the Practice Direction)) to give notice to Noteholders of the terms of the proposed Scheme and of the restructuring, of the relevant background, that the Company intended to apply to the Court for an order permitting it to convene a meeting of Noteholders and to give notice of the issues that the Court would need to consider at the hearing of the Convening Order Summons. The PSL stated that the hearing of the Convening Order Summons had been listed for 5 September. It also explained that the commencement of the Scheme proceedings had been delayed for various reasons including (as discussed in more detail below) difficulties resulting from the effect of sanctions on Russia and the need for negotiations with Alibaba. The PSL noted that the terms of the scheme provided that the date on which the scheme became effective (the Restructuring Effective Date) must occur by a certain date (the Longstop Date) which had initially been 13 October 2022 but which the Company wished to amend to 31 October 2022. The PSL was notified to Noteholders via various different methods. These were posting the PSL on the website established by the Company to upload relevant information and documents relating to the scheme; circulating the PSL electronically through the clearing systems (Euroclear Bank S.A./N.V. and Clearstream Banking, S.A.) and sending the PSL via email 9 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 9 of 55 2022-11-17 FSD2022-0165 Page 9 of 55 2022-11-17 FSD2022-0165 Page 9 of 55 2022-11-17 FSD2022-0165 Page 9 of 55 2022-11-17 FSD2022-0165 Page 9 of 55 2022-11-17 FSD2022-0165 Page 9 of 55 2022-11-17 FSD2022-0165 Page 9 of 55 2022-11-17 FSD2022-0165 Page 9 of 55 2022-11-17 FSD2022-0165 Page 9 of 55 2022-11-17 FSD2022-0165 Page 9 of 55 2022-11-17 FSD2022-0165 Page 9 of 55 2022-11-17 FSD2022-0165 Page 9 of 55 2022-11-17 FSD2022-0165 Page 9 of 55 2022-11-17 FSD2022-0165 Page 9 of 55 2022-11-17 FSD2022-0165 Page 9 of 55 2022-11-17 FSD2022-0165 Page 9 of 55 2022-11-17 FSD2022-0165 Page 9 of 55 2022-11-17 FSD2022-0165 Page 9 of 55 2022-11-17 FSD2022-0165 Page 9 of 55 2022-11-17 FSD2022-0165 Page 9 of 55 2022-11-17 directly to each Noteholder who had registered with the Information Agent or had otherwise notified the Company or the Information Agent of its email address. 27. As noted above, the petition and the Convening Order Summons were then filed on 28 July

¶ [2022] The hearing of that summons was originally listed for 5 September 2022. However it subsequently became necessary to delay the hearing until 15 September 2022. Noteholders were notified of this change by letter dated 2 September 2022 (the 2 September 2022 Letter) which was distributed using the same methods of communication that had been used for giving notice of and circulating the PSL. 28. The Company had planned to circulate on 2 September 2022 or shortly thereafter an update to Noteholders to inform them of the changes that had been made since the PSL to the terms and structure of, and the process for voting on, the scheme. The 2 September 2022 Letter stated that “Further details on the Scheme will follow early next week.” But unfortunately, because of further delays in finalising aspects of the restructuring, in particular delays in obtaining confirmation from the Old Notes Trustee that it would be prepared to act as a trustee of the new notes to be issued under the scheme (the New Notes) and that it would assume other roles in connection with the New Notes, the update was further delayed. On 12 September 2022, three days before the hearing of the Convening Order Summons, the Company eventually sent out the update (the Additional PSL) once again using the same methods of communication as had been used for the PSL. The Additional PSL explained the revisions to the scheme and the restructuring that had been made since the PSL and attached copies of the amendments to the scheme documents required to give effect to those changes. The terms of the RSA and the high level of Noteholder support for the Scheme 29. A detailed overview of the RSA is set out at [5.10] of the Explanatory Statement. Its terms can be summarised as follows. Under the RSA, any Noteholder who accedes to the RSA by the Instruction Fee Deadline, votes in favour of the Scheme at the Scheme meeting and does not exercise its rights to terminate the RSA or breach any provision of it in any material respect, will be a Consenting Creditor, and will receive a cash fee on the Restructuring Effective Date 10 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 10 of 55 2022-11-17 FSD2022-0165 Page 10 of 55 2022-11-17 FSD2022-0165 Page 10 of 55 2022-11-17 FSD2022-0165 Page 10 of 55 2022-11-17 FSD2022-0165 Page 10 of 55 2022-11-17 FSD2022-0165 Page 10 of 55 2022-11-17 FSD2022-0165 Page 10 of 55 2022-11-17 FSD2022-0165 Page 10 of 55 2022-11-17 FSD2022-0165 Page 10 of 55 2022-11-17 FSD2022-0165 Page 10 of 55 2022-11-17 FSD2022-0165 Page 10 of 55 2022-11-17 FSD2022-0165 Page 10 of 55 2022-11-17 FSD2022-0165 Page 10 of 55 2022-11-17 FSD2022-0165 Page 10 of 55 2022-11-17 FSD2022-0165 Page 10 of 55 2022-11-17 FSD2022-0165 Page 10 of 55 2022-11-17 FSD2022-0165 Page 10 of 55 2022-11-17 FSD2022-0165 Page 10 of 55 2022-11-17 FSD2022-0165 Page 10 of 55 2022-11-17 FSD2022-0165 Page 10 of 55 2022-11-17 FSD2022-0165 Page 10 of 55 2022-11-17 FSD2022-0165 Page 10 of 55 2022-11-17 in an amount equal to 1% of the aggregate principal amount of that Consenting Creditor’s Old Notes as at the Instruction Fee Deadline (the Instruction Fee). Mr Zhou confirmed in Zhou 1 (at [49]) that as at the date of his affirmation (9 September 2022) approximately 89.07% by value of Noteholders had signed or acceded to the RSA and therefore had undertaken to vote in favour of the Scheme at the Scheme meeting. The terms of the Scheme 30. The terms of the Scheme were summarised in Zhou 1 at [61] to [87] and in further detail in section 7 of the Explanatory Statement and, as I have noted, set out in Appendix 4 to the Explanatory Statement. The Scheme will only affect the rights of the Company, the Subsidiary Guarantors and the “Scheme Creditors.” 31. Scheme Creditors are defined as “without double counting, the Noteholders, the Old Notes Trustee and the Depositary.” As regards voting, however, the Old Notes Trustee and the Depositary have agreed not to vote at the scheme meeting. The Noteholders are defined as “those Persons with an economic or beneficial interest as principal in the Old Notes held in global form or global restricted form through the Clearing Systems at the Record Date, each of whom has a right upon the satisfaction of certain conditions, to be issued with definitive registered notes in accordance with the terms of the Old Notes.” A Released Claim is defined as “any Scheme Claim, Ancillary Claim, or any past, present and/or future Claim arising out of, relating to or in respect of: (a) the Old Notes Documents; (b) the preparation, negotiation, sanction and implementation of [the] Scheme and/or the RSA; and/or (c) the execution of the Restructuring Documents and the carrying out of the steps and transactions contemplated in [the] Scheme …” An Ancillary Claim is a claim against a Released Person. The following are defined as a Released person: the Company; the Subsidiary Guarantors, the Group, their Affiliates, Personnel and Advisers; the Old Notes Trustee and its connected parties and advisers; the New Notes Trustee and its connected parties and advisers; the Holding Period Trustee (whose role I discuss below); the Scheme Supervisor (who is Mr Lawson, who is appointed by the Board to act in such capacity); the Information Agent and the Cayman Islands Information Agent (which is Alvarez & Marsal Cayman Islands Limited). 11 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 11 of 55 2022-11-17 FSD2022-0165 Page 11 of 55 2022-11-17 FSD2022-0165 Page 11 of 55 2022-11-17 FSD2022-0165 Page 11 of 55 2022-11-17 FSD2022-0165 Page 11 of 55 2022-11-17 FSD2022-0165 Page 11 of 55 2022-11-17 FSD2022-0165 Page 11 of 55 2022-11-17 FSD2022-0165 Page 11 of 55 2022-11-17 FSD2022-0165 Page 11 of 55 2022-11-17 FSD2022-0165 Page 11 of 55 2022-11-17 FSD2022-0165 Page 11 of 55 2022-11-17 FSD2022-0165 Page 11 of 55 2022-11-17 FSD2022-0165 Page 11 of 55 2022-11-17 FSD2022-0165 Page 11 of 55 2022-11-17 FSD2022-0165 Page 11 of 55 2022-11-17 FSD2022-0165 Page 11 of 55 2022-11-17 FSD2022-0165 Page 11 of 55 2022-11-17 FSD2022-0165 Page 11 of 55 2022-11-17 FSD2022-0165 Page 11 of 55 2022-11-17 FSD2022-0165 Page 11 of 55 2022-11-17 FSD2022-0165 Page 11 of 55 2022-11-17 FSD2022-0165 Page 11 of 55 2022-11-17 FSD2022-0165 Page 11 of 55 2022-11-17 FSD2022-0165 Page 11 of 55 2022-11-17 32. Under the Scheme, on the Restructuring Effective Date: (a). Scheme Creditors will release in full the Released Claims, in exchange for the New Notes and the Cash Consideration (which means 6% of the outstanding principal amount of the Old Notes held by the relevant Noteholder together with interest on the Old Notes accrued up to but excluding 18 April 2022). (b). the Old Notes will be released, cancelled, fully compromised and forever discharged, and the respective rights and obligations of the Scheme Creditors, the Company, the Subsidiary Guarantors and the Old Notes Trustee towards one another under the Old Notes Documents will terminate and be of no further effect. (c). Noteholders who are Consenting Creditors will be paid the Instruction Fee. (d). the New Notes will be issued to Scheme Creditors in tranches which mature on the first anniversary and then in six-month increments from the date of the issue of the New Notes. The interest rate on the New Notes will be 8% per annum. The first principal payment of 10% of the aggregate principal amount of the New Notes will be due one year after the Restructuring Effective Date. The New Notes will mature on the third anniversary of the date that they are issued. (e). the liability of the Subsidiary Guarantors will be released. The Kroll liquidation analysis 33. An estimated outcome for Scheme Creditors of a liquidation of the Company was prepared by Kroll. They prepared a written liquidation analysis (dated 29 July 2022) which was discussed in Zhou 1 at [93] to [97] and set out, as I have said, at appendix 3 to the Explanatory Statement. In summary, the return to Scheme Creditors in an insolvent liquidation was estimated by Kroll to be in a range from 25.8% (low case) to 36.1% (high case). The liquidation analysis assumed 12 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 12 of 55 2022-11-17 FSD2022-0165 Page 12 of 55 2022-11-17 FSD2022-0165 Page 12 of 55 2022-11-17 FSD2022-0165 Page 12 of 55 2022-11-17 FSD2022-0165 Page 12 of 55 2022-11-17 FSD2022-0165 Page 12 of 55 2022-11-17 FSD2022-0165 Page 12 of 55 2022-11-17 FSD2022-0165 Page 12 of 55 2022-11-17 FSD2022-0165 Page 12 of 55 2022-11-17 FSD2022-0165 Page 12 of 55 2022-11-17 FSD2022-0165 Page 12 of 55 2022-11-17 FSD2022-0165 Page 12 of 55 2022-11-17 FSD2022-0165 Page 12 of 55 2022-11-17 FSD2022-0165 Page 12 of 55 2022-11-17 FSD2022-0165 Page 12 of 55 2022-11-17 FSD2022-0165 Page 12 of 55 2022-11-17 FSD2022-0165 Page 12 of 55 2022-11-17 FSD2022-0165 Page 12 of 55 2022-11-17 FSD2022-0165 Page 12 of 55 2022-11-17 FSD2022-0165 Page 12 of 55 2022-11-17 FSD2022-0165 Page 12 of 55 2022-11-17 FSD2022-0165 Page 12 of 55 2022-11-17 FSD2022-0165 Page 12 of 55 2022-11-17 FSD2022-0165 Page 12 of 55 2022-11-17 FSD2022-0165 Page 12 of 55 2022-11-17 FSD2022-0165 Page 12 of 55 2022-11-17 that all entities in the Group are put into liquidation. It assessed the likely realisable value of each of the companies in the Group on what is described as a segmented based approach. Kroll explained what this means in [3.2] of their analysis: “E-House has over 300 major subsidiary entities within the Group. Given the significant number of subsidiaries and the complexity of the Group’s corporate structure, we have sought to conduct our analysis on a consolidated basis for each Segment level. Based on the information provided by Management, we have aggregated the assets and liabilities of each Segment. For this Liquidation Analysis, we have assumed that upon the liquidation of each Segment, the proceeds from the aggregated realisation of assets for any specific Segment will be used to repay the aggregated debts recognised in the same Segment.” 34. The six segments identified by Kroll were as follows: the Company; 125 subsidiary entities that are principally engaged in real estate agency and consultancy; 17 subsidiary entities that are principally engaged in the provision of real estate related education services; 7 subsidiary entities that are engaged in offshore financing and marketing activities; 54 subsidiary entities that are principally engaged in digital marketing and brokerage; and 104 entities controlled by Leju Holdings Limited, a NYSE-listed entity that is principally engaged in the provision of online-to-offline real estate services. The liquidation analysis assumed that each company in the Group will cease operations upon liquidation and as a result that its assets will be sold at discounted prices rather than at prices that might be achieved if they were sold on a going concern basis. The impact of Russian sanctions 35. The UK Government, the US Government and the European Union have imposed sanctions on Russia including sanctions in response to Russia’s invasion of Ukraine. The UK’s sanctions have been extended to and apply in the Cayman Islands. The Company was required to consider the effects, and to modify the terms of the scheme to deal with issues arising because, of these sanctions. The Company had to consider whether any Noteholders were subject to these sanctions regimes (in particular the asset freezes imposed thereby) in order to decide whether sanctions prohibited the discharge of the Old Notes, the issue of the New Notes and the payment of fees to Noteholders. Furthermore, as the Company discovered, it was also necessary 13 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 13 of 55 2022-11-17 FSD2022-0165 Page 13 of 55 2022-11-17 FSD2022-0165 Page 13 of 55 2022-11-17 FSD2022-0165 Page 13 of 55 2022-11-17 FSD2022-0165 Page 13 of 55 2022-11-17 FSD2022-0165 Page 13 of 55 2022-11-17 FSD2022-0165 Page 13 of 55 2022-11-17 FSD2022-0165 Page 13 of 55 2022-11-17 FSD2022-0165 Page 13 of 55 2022-11-17 FSD2022-0165 Page 13 of 55 2022-11-17 FSD2022-0165 Page 13 of 55 2022-11-17 FSD2022-0165 Page 13 of 55 2022-11-17 FSD2022-0165 Page 13 of 55 2022-11-17 FSD2022-0165 Page 13 of 55 2022-11-17 FSD2022-0165 Page 13 of 55 2022-11-17 FSD2022-0165 Page 13 of 55 2022-11-17 FSD2022-0165 Page 13 of 55 2022-11-17 FSD2022-0165 Page 13 of 55 2022-11-17 FSD2022-0165 Page 13 of 55 2022-11-17 FSD2022-0165 Page 13 of 55 2022-11-17 FSD2022-0165 Page 13 of 55 2022-11-17 FSD2022-0165 Page 13 of 55 2022-11-17 FSD2022-0165 Page 13 of 55 2022-11-17 FSD2022-0165 Page 13 of 55 2022-11-17 FSD2022-0165 Page 13 of 55 2022-11-17 FSD2022-0165 Page 13 of 55 2022-11-17 FSD2022-0165 Page 13 of 55 2022-11-17 FSD2022-0165 Page 13 of 55 2022-11-17 to consider whether any Russian banks or custodians through whom Noteholders hold their Old Notes (which banks and custodians are participants in and hold accounts with the clearing systems) were subject to sanctions and the impact of sanctions on the operation of the clearing systems. Sanctions may have an impact on the means by which the clearing systems communicate with and distribute documents to their participants and account holders. This could extend to the process by which the Explanatory Statement and related documents are to be distributed to Noteholders, the blocking by the clearing systems of transfers of and dealings in the Old Notes and the process for obtaining voting instructions from Noteholders. 36. Where notes are held through a clearing system the identity of the beneficial holders of the notes will generally not be known to the issuer of the notes and may be impossible to ascertain otherwise than with the assistance of the clearing system. The issuer relies on the clearing systems to facilitate communications with (both to and from) noteholders. The issuer sends a notice or other communication to the clearing system who transmits it to its account holders, who in turn submit it to those who hold accounts with them. The clearing system will also transmit voting instructions back from the ultimate beneficial owner to the issuer. The issuer also depends on the clearing system to ensure the integrity of the voting process by blocking trading in and transfers of the notes during the period in which noteholders are voting. The issuer also depends on account holders in the clearing system to provide confirmation and verification that a person claiming to be a scheme creditor is a holder of notes and the amount of notes they hold. The position role of the clearing systems and their involvement in communications with Noteholders and the voting process is explained in Ms Yeung’s First Affidavit. 37. The sanctions regimes I have identified are relevant to the Company’s scheme for the following reasons: (a). the Cayman Islands sanctions regime is engaged because the Company is a Cayman Islands exempted company. As a British Overseas Territory the UK’s sanction regulations (The Russia (Sanctions) (EU Exit) Regulations 2019) are applied to and 14 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 14 of 55 2022-11-17 FSD2022-0165 Page 14 of 55 2022-11-17 FSD2022-0165 Page 14 of 55 2022-11-17 FSD2022-0165 Page 14 of 55 2022-11-17 FSD2022-0165 Page 14 of 55 2022-11-17 FSD2022-0165 Page 14 of 55 2022-11-17 FSD2022-0165 Page 14 of 55 2022-11-17 FSD2022-0165 Page 14 of 55 2022-11-17 FSD2022-0165 Page 14 of 55 2022-11-17 FSD2022-0165 Page 14 of 55 2022-11-17 FSD2022-0165 Page 14 of 55 2022-11-17 FSD2022-0165 Page 14 of 55 2022-11-17 FSD2022-0165 Page 14 of 55 2022-11-17 FSD2022-0165 Page 14 of 55 2022-11-17 FSD2022-0165 Page 14 of 55 2022-11-17 FSD2022-0165 Page 14 of 55 2022-11-17 FSD2022-0165 Page 14 of 55 2022-11-17 FSD2022-0165 Page 14 of 55 2022-11-17 FSD2022-0165 Page 14 of 55 2022-11-17 FSD2022-0165 Page 14 of 55 2022-11-17 FSD2022-0165 Page 14 of 55 2022-11-17 FSD2022-0165 Page 14 of 55 2022-11-17 FSD2022-0165 Page 14 of 55 2022-11-17 FSD2022-0165 Page 14 of 55 2022-11-17 FSD2022-0165 Page 14 of 55 2022-11-17 FSD2022-0165 Page 14 of 55 2022-11-17 FSD2022-0165 Page 14 of 55 2022-11-17 FSD2022-0165 Page 14 of 55 2022-11-17 FSD2022-0165 Page 14 of 55 2022-11-17 FSD2022-0165 Page 14 of 55 2022-11-17 in the Cayman Islands by The Russia (Sanctions) (Overseas Territories) Order 2020 (as amended). (b). the United States sanctions regime is potentially engaged because the Old Notes are governed by New York law and denominated in US$. (c). the European Union sanctions regime is engaged because the clearing systems through which the Old Notes are held are subject to certain sanctions imposed by the European Union. This includes, since March 2022, the blocking and suspension of settlement services provided by the clearing systems in respect of accounts held by certain Russian banks and financial intermediaries, including the National Settlement Depository (NSD) which is the central securities depository for the Russian Federation. 38. Consequently, the Company considered and took advice on the impact on the scheme process and the nature and scope of these sanction regimes. Mr Zhou dealt with this in his evidence. He summarised the position in Zhou 2 as follows (see also Zhou 1 at [86]): “6. Various financial sanctions have been imposed in response to Russia's invasion of Ukraine. As a result of such sanctions, the Clearing Systems (through which the Old Notes are settled) have blocked all transfers with accounts held by certain Russian banks and financial intermediaries. These restrictions have affected approximately 6.65% of the Noteholders (by value) who acceded to the RSA. 7. The Company has been advised that the Scheme does not constitute a breach of the applicable financial sanctions regimes of the United States, the United Kingdom, the Cayman Islands and the European Union. 8. Nevertheless, it is a matter for all stakeholders in the Scheme …to take their own commercial position on sanctions.” 39. A summary of the steps taken and advice received by the Company was set out by Mr Lam in his Affidavit. He noted that the Company had made various inquiries, with the assistance of the Information Agent, to ascertain whether any Noteholders were subject to or affected by the sanctions regimes. The Company deduced, based on information provided by the clearing 15 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 FSD2022-0165 Page 15 of 55 2022-11-17 systems and obtained from the process for obtaining Noteholders’ agreement to accede to the RSA, that approximately 6.65% of those Noteholders who acceded to the RSA hold their Old Notes through the NSD. The clearing systems have blocked transfers from the accounts of NSD’s held by them. Mr Lam explained (at [22]) that: “I have been informed by D.F. King, the information agent engaged by the Company, that Euroclear and Clearstream, through which the 2022 Notes and the 2023 Notes are settled, have blocked all transfers with accounts held by certain Russian banks and financial intermediaries, including Russia's National Settlement Depositary (the "NSD") from March 2022 (prior to the time the RSA was entered into in April 2022). I have also been informed by D. F. King that approximately 6.65 per cent of the holders of the 2022 Notes and the 2023 Notes who acceded to the RSA did not submit instructions through Euroclear or Clearstream. The Company was provided with a lock-up report containing the identity those holders that had acceded to the RSA, including those who did not submit instructions through Euroclear or Clearstream (the "Lock-up Report"). So far as the Company can determine, the Lock-up Report contains the identity of all the holders of the 2022 Notes and 2023 Notes that did not submit instructions through Euroclear or Clearstream (the "Blocked Noteholders"). The Company has informed us that it believes, after due inquiry with D.F. King, that all of its Blocked Noteholders hold their 2022 Notes and/or 2023 Notes through the account of the NSD. As a result of the transfer block imposed by Euroclear and Clearstream, the Company believes there has been no change to the list of Blocked Noteholders since the time the RSA was entered into.” 40. Accordingly, some Noteholders are unable to receive documents or give instructions via the clearing systems (I refer to all such Noteholders as the Blocked Noteholders). It appears that the Blocked Noteholders are Noteholders who hold their Old Notes through accounts with NSD or with other custodians who themselves have accounts with NSD. Some of the Blocked Noteholders have, despite these difficulties, been contacted by the Company and acceded to and agreed to be by bound the RSA. I refer to these Noteholders as the RSA Blocked Noteholders. There may be other Blocked Noteholders but the Company currently does not know whether any exist or if they do exist who they are. 41. 89.07% by value of all Noteholders have acceded to the RSA and, as I have said, the RSA Blocked Noteholders constitute approximately 6.65% of all such acceding Noteholders. The alternative method for contacting the RSA Blocked Noteholders was discussed in Zhou 1 at [53]. The PSL and other documents and notices were posted on the scheme website so that any 16 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 FSD2022-0165 Page 16 of 55 2022-11-17 Blocked Noteholder could access them and were sent by email to each Blocked Noteholder whose email address was known to the Company or the Information Agent (see Zhou 1 at [102]). 42. Therefore, so far as the Company was able to ascertain, all the RSA Blocked Noteholders held their Old Notes through NSD and none of the Noteholders were themselves subject to the asset freezes or other provisions of the sanctions regimes. The Company had also, as Mr Lam confirmed, verified that none of the RSA Blocked Noteholders were listed or treated as designated or blocked persons under the regulations governing the relevant sanctions. 43. As a further precaution to ensure that no Noteholder who is prevented by sanctions from voting on, from having the Old Notes discharged by or from receiving the scheme consideration under the scheme, from doing so, the Company will require Scheme Creditors to execute a distribution confirmation deed. This contains various sanctions related confirmations to be made by and on behalf of each Scheme Creditor to confirm that they are not subject to sanctions. If any Scheme Creditor fails to give the required affirmative confirmations then Company will check that Scheme Creditor's details against the lists of designated sanctioned persons in the Cayman Islands, the United Kingdom, the European Union and the United States to ensure that the Scheme Creditor is not on a sanctioned person. 44. In these circumstances, the Company is satisfied that, based on and following what it considers to be reasonable inquiries, the promotion and implementation of the scheme will not give rise to a breach of any applicable sanctions regime. The Company’s approach before the hearing of the Convening Order Summons to voting by Blocked Noteholders 45. Thus the clearing systems’ decision to suspend settlement services and communications through accounts held by NSD has had an impact on the process for obtaining the approval of and implementing the scheme. As a result, the Company has been unable to give notices to or obtain voting instructions from the Blocked Noteholders via the clearing systems in the usual way (or make payments or transfer the scheme consideration to Blocked Noteholders). In 17 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 FSD2022-0165 Page 17 of 55 2022-11-17 addition, the Company’s bank has advised that it cannot make direct payments to the Blocked Noteholders (see Zhou 1 at [58]) and the Information Agent has indicated (in light of comments made by the clearing systems) that it is unable to collect information and voting instructions from the Blocked Noteholders outside the clearing systems. 46. The difficulties associated with sanctions were not addressed prior to the RSA being signed because the Company was not aware of them at the time. The need to investigate and resolve these difficulties and to prepare amendments to the scheme documents caused delays in finalising the terms and structure of the scheme and were mainly responsible for the need to delay the hearing of the Convening Order Summons. The amendments that the Company decided were needed to address the problems caused by sanctions were summarised in the Additional PSL as follows (underlining added): “5. Since the [PSL], the Scheme Company has been working through the mechanics of the Restructuring and, following discussions with Euroclear and Clearstream, it has been agreed that the new notes to be issued pursuant to the Restructuring (the "New Notes") can take a global form and will be on the same terms as the Term Sheet to the RSA, subject to the amendments shown in Appendix B to this PSL. The trustee of the New Notes will be an independent and professional provider of note trustee services that will be confirmed by the Scheme Company as soon as possible. The Scheme and Restructuring are also subject to the amendments set out below. 6. First, the Scheme Consideration due to those persons or entities who hold the Old Notes through accounts held by certain Russian banks and financial intermediaries, including the [NSD], whose settlement services have been suspended and blocked by Euroclear and Clearstream, (the "Blocked Scheme Creditors") will need to be first held by a trustee in accordance with the terms of the Holding Period Trust Deed (the "Holding Period Trustee") on trust for the Blocked Scheme Creditors until the maturity date of the New Notes or the lifting of the applicable sanctions, whichever is earlier. If applicable sanctions are still in place upon the expiry of the Holding Period Trust, the Scheme Company will undertake in the Scheme to create a successor trust (the "Successor Trust") for Blocked Scheme Creditors' Scheme Consideration to be held until the earlier of (i) the expiry of the perpetuity period of the Successor Trust or (ii) the lifting of applicable sanctions, with the Blocked Scheme Creditors being given a reasonable period thereafter to recover their entitlement to the Scheme Consideration in accordance with the terms of the Successor Trust. The same will apply to the Instruction Fee, which is to be paid to those Blocked Scheme Creditors who 18 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 FSD2022-0165 Page 18 of 55 2022-11-17 are also Consenting Creditors. The Holding Period Trustee will be Ultrex Holdings (HK) Limited, a Hong Kong incorporated subsidiary of the Scheme Company. 7. Further and on account of the same sanctions regulations of the European Union, the Information Agent is not able to collect information, including voting instructions, from the Blocked Scheme Creditors. As a result, the Blocked Scheme Creditors will not be permitted to attend or vote at the Scheme Meeting. However, Blocked Scheme Creditors who are also Consenting Creditors will still be eligible to receive the Instruction Fee, on the terms set out in paragraph 6 above. 8. Finally, as anticipated in the [PSL], the Scheme Company proposes an amendment to the RSA to extend the Longstop Date until 31 October 2022. The Scheme Company now also proposes a further amendment to the RSA to provide the Scheme Company with the right (at its sole discretion) to extend the Longstop Date to 30 November 2022 (together with the initial extension until 31 October 2022, the "Longstop Date Extension") should additional time be required to complete the Restructuring. Consenting Creditors who vote in favour of the Scheme will be treated as having voted in favour of the Longstop Date Extension.” 47. As this extract makes clear, the Company decided, in order to deal with the impact of sanctions, that the New Notes could be issued in global form; that the New Notes could not be issued to Blocked Noteholders but would need to be held on their behalf by a trustee and Blocked Noteholders could not and would not be allowed to vote at the scheme meeting. 48. The arrangements for voting at the scheme meeting were set out in the Explanatory Statement and the documents attached to it, including the solicitation package. These explained what steps needed to be taken by a Scheme Creditor in order to be entitled to attend and vote at the scheme meeting. In the case of intermediated securities such as the Old Notes held through clearing systems, as I have noted, the clearing systems play a critical role since they pass on documents to their account holders (who then forward the documents to sub-custodians and thereby to Noteholders), block dealings in the Old Notes while voting is taking place and transmit back voting instructions executed by such account holders on behalf of Noteholders. 49. The Company prepared a form of document to be used by account holders for the purpose of recording and evidencing the Old Notes held and the voting instructions given by Noteholders. 19 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 FSD2022-0165 Page 19 of 55 2022-11-17 This is the Account Holder Letter which must be signed by an Account Holder, who is defined in the Scheme as a person who has an account with the clearing systems and is recorded in the books of the clearing systems as holding in that account a book-entry interest in the Old Notes. The Account Holder in the Account Holder Letter identifies and provides the name of the person who is the to be treated as the Scheme Creditor in respect of a specified amount of the Old Notes and on whose behalf the Account Holder is acting. This ensures that the ultimate beneficial owner of the relevant Old Notes can attend and vote at the Scheme Meeting in accordance with the “Looking through the Register” approach set out in the Practice Direction (see [4]). The Account Holder in the Account Holder Letter gives various confirmations (representations) and voting instructions on behalf of the Scheme Creditor and provision is made in the Account Holder Letter for the appointment of a proxy by the Scheme Creditor. Appendix 2 to the Account Holder Letter attaches a distribution confirmation deed (to which I made reference above) which all Scheme Creditors must execute in order to be entitled to receive and before receiving their share of the New Notes. Annex B to the distribution confirmation deed sets out various securities law and sanctions confirmations and undertakings to be given by the relevant Scheme Creditor. The sanctions confirmations, in summary, confirm that the Scheme Creditor and its affiliates and associates are not subject to sanctions or acting for Russia and will not use the proceeds of the New Notes to fund or facilitate the business of any sanctioned person or of Russia. 50. The Explanatory Statement and the solicitation package confirmed and expanded on what was said in the Additional PSL regarding the position of the Blocked Noteholders. Blocked Noteholders (including the RSA Blocked Noteholders) would be excluded from voting. The Company considered that this was necessary because the Blocked Noteholders could not receive documents or give voting instructions via the clearing systems and because the Information Agent was also unable to send documents to or receive voting instructions from them. However, to ensure that the RSA Blocked Noteholders (who had acceded to the RSA and thereby agreed to submit an Account Holder Letter and vote in favour of the Scheme at the scheme meeting, and who were only entitled to the Instruction Fee if they did so) would be financially no worse off by being unable to vote, the Company agreed to waive the RSA Blocked Noteholders’ obligation to submit an Account Holder Letter and agreed that the RSA 20 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 FSD2022-0165 Page 20 of 55 2022-11-17 Blocked Noteholders should nonetheless still be paid their Instruction Fee if the Scheme was approved and sanctioned. This would be paid to the Holding Period Trustee. Third Parties 51. The Scheme also provides that by no later than the date of the sanction hearing, various non- parties to the Scheme will give undertakings to the Company and the Court to be bound by the terms of the Scheme. These include the Subsidiary Guarantors, the subsidiaries who will guarantee the New Notes, the Old Notes Trustee, the Depositary, the Old Notes Paying and Transfer Agent, the New Notes Trustee,, the New Notes Paying and Transfer Agent, the Holding Period Trustee, the person appointed to act as the supervisor of the Scheme and the Information Agent. The issues arising on the convening hearing 52. It is now well settled that the function of the Court at a scheme convening hearing is not to consider the merits or fairness of the proposed scheme. These issues arise for consideration at the sanction hearing if the scheme is approved by the requisite majority of creditors. At the convening hearing the Court is concerned with a narrower range of issues when determining whether to give directions for the convening of the scheme meeting and if so what those directions should be. The issues for consideration are referred to in the Practice Direction (at [3]). They are now frequently summarised as covering three main areas, namely first, any issues which may arise as to the constitution of the meeting or meetings of creditors; secondly, any issues as to the existence of the Court’s jurisdiction to sanction the scheme and thirdly, any other issue (not going to the merits or fairness of the scheme) which might lead the Court to refuse to sanction it (which will usually include a review of the extent to which the scheme will be effective abroad in other relevant jurisdictions). 53. In addition, the Court will consider whether adequate notice has been given to creditors of the purpose and effect of the proposed scheme and of the convening hearing. The Practice Direction (at [3.1]), as noted above, states that: 21 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 FSD2022-0165 Page 21 of 55 2022-11-17 “….practitioners should consider giving notice to persons affected by the scheme in cases where class or other issues referred to in paragraph 3.3 below arise and where it is practical to do so. Such notice should include a statement of the intention to promote the scheme and of its purpose, and also of the proposed composition of classes and of the intention to raise any issue as referred to in paragraph 3.3 below.” 54. Paragraph 3.3 of the Practice Direction states that: “At the first hearing, the Court will also consider any other issue which is relevant to the jurisdiction of the Court to sanction the scheme, and any other issue which, although not strictly going to jurisdiction, is such that it would unquestionably lead the Court to refuse to sanction the scheme.” 55. In this case, there is no issue as to jurisdiction. The Company is a Cayman Islands incorporated company and is therefore liable to be wound up under the Companies Act. Accordingly, pursuant to section 86(5) of the Companies Act the Court clearly has jurisdiction to convene a scheme meeting (and sanction a scheme) in respect of the Company (I discuss below the relevance of the connections to the jurisdiction for the purpose of the Court’s exercise of its discretion to sanction the Scheme). The Scheme is also clearly an arrangement within the meaning of section 86 of the Companies Act. 56. Issues do however arise in relation to the following matters: the notice of the convening hearing; class composition; the extent to which there are doubts as to the international effectiveness of the Scheme; the adequacy of the disclosure in the Explanatory Statement and the directions to be given for the convening and conduct of the Scheme meeting. I deal with each of these issues in turn. Notice of the convening hearing and amendments to the Scheme 57. As I have noted above, Scheme Creditors were first given notice of the proposed scheme on 5 August 2022 in the PSL. The PSL said that the convening hearing was listed on 5 September

¶ [2022] They were notified on 2 September 2022 that the date of the convening hearing had been put back to 15 September 2022. They were then notified shortly before the convening hearing, 22 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 FSD2022-0165 Page 22 of 55 2022-11-17 on 12 September 2022, that certain amendments to the Scheme were to be made with respect to the treatment of the Blocked Noteholders and that the Company would seek to be granted the power to extend the Longstop Date to 30 November 2022. 58. The question of the timing and adequacy of notice to Scheme Creditors has been considered by a number of authorities. As Mr Justice Zacaroli noted in Re Lecta Paper UK Limited [2019] EWHC 3615 (Ch) (Lecta) at [10] “The essential question, as posed by Norris J in Re NN2 Newco Ltd [2019] EWHC 1917 (Ch), at [22]-[23] is whether in all the circumstances of the case (including the complexity of the scheme, the degree of prior consultation with creditors and the urgency of the scheme) creditors have been given sufficient notice of the basic terms of the scheme and an effective opportunity to raise any concerns.” As Mr Justice Meade said in Re Nostrum Oil & Gas Plc [2022] EWHC 1646 (Ch) (Nostrum) at [25] “the appropriate period of notice is a fact-sensitive matter.” 59. In this case, leaving to one side the position of the Blocked Noteholders, I am satisfied that adequate notice has been given. The basic terms of the Scheme were notified on and have not materially changed since 5 August 2022. The PSL in early August gave notice that the convening hearing would be in early September and the subsequent notice dated 2 September gave just under two weeks’ notice of the revised hearing date (of 15 September). Furthermore, a substantial proportion of the Noteholders have been involved in the restructuring negotiations and have become parties to the RSA. The precise dates on which Noteholders acceded to the RSA have not been disclosed but it is clear that they did so some time in advance of the PSL. In the PSL the Company confirmed (at [39]) that Noteholders holding approximately 90% of the Old Notes had already by 5 August 2022 entered into or acceded to the RSA. 60. But what about the position of the Blocked Noteholders? Some of the Blocked Noteholders acceded to the RSA. They will have been fully informed of the terms of the Scheme. But there may be others who have not come forward. They cannot receive notices through the clearing systems and so must rely on making their own searches of the Company’s website and the HKSE website. This may result in some delays in their picking up and finding out about developments. However, the PSL was uploaded to the Company’s and the HKSE’s website in 23 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 FSD2022-0165 Page 23 of 55 2022-11-17 early August 2022 and therefore it is reasonable to expect that even these other Blocked Noteholders will have been aware of the restructuring proposals, the terms of the Scheme and the timetable for implementing it, including there being a convening hearing in early September. I had a concern that they will only have found out that the Company was proposing that they would not have the right to vote at the Scheme meeting a matter of days before the convening hearing. It is possible that some of the Blocked Noteholders may have wished to object to the Company’s proposal and to have made representations at the convening hearing but were unable to do so in view of the very short notice given of the amendments. However, in this case I do not consider that there is a need to find or justification finding that the Company failed to give adequate notice to the Blocked Noteholders of important amendments to the Scheme so that the convening hearing should be adjourned. First, as I shall explain shortly, I directed at, and the Company has agreed following the convening hearing that Blocked Noteholders be permitted to vote at the Scheme meeting and that arrangements be made that will give them an opportunity to do so outside the clearing systems. Therefore, the main cause of concern that the Blocked Noteholders would have had has been dealt with. Secondly, and most importantly, the Blocked Noteholders will have an opportunity to raise any concerns and objections to sanction of the Scheme at the sanction hearing. In view of the very short notice they were given of the amendments to the Scheme affecting them, they will be given greater leeway than creditors would usually have to raise at the sanction hearing issues that could and should have been brought forward at the convening hearing. Thirdly, the Company is clearly under serious time pressure in view of the Alibaba deadline and an adjournment of the convening hearing would potentially have serious and damaging consequences for the restructuring and the interests of Noteholders. Class composition 61. The Court’s approach to considering the question of class composition was neatly summed up recently by Meade J in Nostrum as follows: “The basic principle is that a class must be confined to those persons whose rights are not so dissimilar as to make it impossible for them to consult together with a view to their common interest (see Sovereign Life Assurance v Dodd [1892] 2 QB at [573] and many cases since, including e.g. Re Telewest Communications Plc [2004] BCC 24 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 FSD2022-0165 Page 24 of 55 2022-11-17 342). In answering the question of whether a separate class is required, the Court must consider the rights that creditors would have if the proposed scheme were not implemented. In carrying out that exercise, the Court is concerned with rights, not interests. Even where there are differences in rights, the differences must be sufficient to make consultation impossible. It is important that the Court should not be too picky, to guard against the risk that that will enable a small group to hold out unfairly against a majority.” 62. In this jurisdiction the test to be applied is also summarised in the Practice Direction (at [3.2]). 63. When dividing creditors or members into classes, two considerations are relevant: the rights that the creditors or members would have if the scheme were not implemented, and the rights that the creditors or members have if the scheme is implemented. As Chadwick LJ said in Re Hawk Insurance Co Ltd [2002] BCC 300 at [30]: “In each case the answer to that question will depend upon analysis (i) of the rights which are to be released or varied under the scheme and (ii) of the new rights (if any) which the scheme gives, by way of compromise or arrangement, to those whose rights are to be released or varied.” 64. The Company submitted that in the present case, the Scheme Creditors should vote in a single class: (a). the Court needed to consider the rights of Scheme Creditors under the Scheme and under the alternative to the Scheme. The Company submitted that the Scheme Creditors have the same rights and are treated equally under the Scheme and would have the same rights under the alternative to the Scheme. (b). the Scheme Creditors will, subject to the two differences discussed below, be given identical legal rights under the Scheme. Once the restructuring is implemented, each Scheme Creditor will be entitled to receive the same package of Scheme consideration pro rata to their existing claims. There is no relevant difference of treatment and therefore no difference in the rights acquired by Scheme Creditors under the Scheme. 25 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 FSD2022-0165 Page 25 of 55 2022-11-17 (c). the Company also submitted that the evidence indicated that the alternative to the Scheme (the comparator) was an insolvent liquidation. If the Scheme is not approved the Company is very likely to enter into insolvent liquidation. In that situation, all Scheme Creditors would have the same legal rights against the Company. They would have unsecured claims ranking pari passu, and would receive (based on the Kroll liquidation analysis) the same estimated pro rata return of approximately 25.8% to 36.1%. The Company submitted that the Kroll liquidation analysis had been properly prepared and set out a realistic and reasonable estimate of the recoveries that Scheme Creditors would make if the Company and other members of the Group were forced in liquidation upon the failure of the Scheme. 65. The Company accepted that there were some differences of treatment between Scheme Creditors but that these differences were said to be immaterial and did not fracture the class: (a). some, but not all, Scheme Creditors have signed the RSA and will receive the Instruction Fee although all Noteholders were offered the opportunity to accede to the RSA and receive the Instruction Fee. (b). the Blocked Noteholders will not be able to receive the Scheme consideration on the Restructuring Effective Date, but instead the Scheme consideration to which the Blocked Noteholders would otherwise be entitled will be held on trust by the Holding Period Trustee, and subsequently the trustee of the Successor Trust until the applicable sanctions are lifted or for the duration of the two trusts. Furthermore, the Company’s position at the convening hearing was that the Blocked Noteholders would not be entitled to attend or vote at the Scheme meeting. 66. As regards the fees, the Company argued that the fact that creditors had entered into a lock-up agreement did not give rise to a class issue. Rather, it was relevant to the exercise of the discretion of the Court when deciding whether to sanction a scheme (citing Telewest Communications [2004] BCC 342 at [53]). The Company argued that it was well-established that fees paid in connection with lock-up agreements of a type similar to the RSA (commonly 26 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 FSD2022-0165 Page 26 of 55 2022-11-17 referred to as consent fees) did not fracture a class merely because some members of the class will not receive the fee (In Re DX Holdings Ltd and other Companies [2010] EWHC 1513 (Ch) at [7]). Two factors were important: first, whether or not the consent fee was offered to all scheme creditors and secondly, whether the consent fee was likely to exert any material influence on creditors’ voting decisions (Re Magyar Telecom [2014] BCC 448 at [12]; Re PrimaCom Holdings GmbH (No.1) [2013] BCC 201 at [55]-[57] and Re Privatbank [2015] EWHC 3186 (Ch) at [30]). In this case, as already noted, the Instruction Fee had been offered to all Noteholders who acceded to the RSA by the Instruction Fee Deadline and all Noteholders were given the opportunity and sufficient time to accede to the RSA after the announcement of the RSA on 31 March 2022; the Instruction Fee was small, being only 1% of the outstanding principal amount of the Old Notes held by Noteholders who are Consenting Creditors; under the Scheme, the Noteholders were expected to receive 100% of the sums due under the Old Notes (albeit at a later date) but in a liquidation, the return was expected to be between 25.8% (low) and 36.1% (high) so that in these circumstances it was highly unlikely that a Noteholder who would otherwise have intended or planned to vote against the Scheme would have been persuaded and incentivised to vote in favour in order to obtain the Instruction Fee and a small additional 1% return. 67. As regards the treatment of the Blocked Noteholders: (a). the Company noted that the Blocked Noteholders were receiving the same benefits under the Scheme as other Scheme Creditors (including, where they had acceded to the RSA, the Instruction Fee) but at a later date. The Company submitted that the delay in the Blocked Noteholders having access to their Scheme consideration was not unusual where parties to a scheme were subject to regulatory or other requirements that made it unlawful for them to receive the scheme consideration immediately. The Company relied on the following recent statement of the applicable principle by Mr Justice Marcus Smith in Re Haya Holco 2 plc [2022] EWHC 1079 (Ch) (Haya) at [72(3)]: “Scheme Creditors will be required to make certain customary confirmations with respect to US securities legislation in order to certify their ability to 27 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 FSD2022-0165 Page 27 of 55 2022-11-17 receive their allocation of New SSNs and New Shares. If a Scheme Creditor is unable to make such customary confirmations, it may nominate a person to receive its allocation of New SSNs and New Shares on its behalf. If a Scheme Creditor fails to nominate such a person, then the New SSNs and New Shares for that Scheme Creditor will be transferred into a "holding trust" for up to 12 months. If the New SSNs and New Shares still have not been claimed at the end of that period, then they will be sold and the net proceeds will be distributed to the relevant creditor. This structure does not, in my judgment, fracture the class. It is a customary feature of schemes that involve the issuance of new debt or equity securities. The Scheme Creditors have the same rights in relation to the New SSNs and New Shares under the Scheme. An inability to give the customary confirmations required to be given to receive an allocation of New SSNs and New Shares goes merely to the enjoyment of those rights, creating a potential fairness, not class, issue: see Re Lecta Paper UK Ltd [2019] EWHC 3615 (Ch) at [19] per Zacaroli J; Re Obrascon Huarte Lain SA [2021] EWHC 859 (Ch) at [28] per Adam Johnson J; Re Swissport Fuelling Ltd [2020] EWHC 3064 (Ch) at [82]-[83] per Trower J." (b). as regards the prohibition on the Blocked Noteholders from attending or voting at the Scheme Meeting, the Company noted that the issue had arisen in Nostrum, another sanctions case, but had not affected Meade J’s decision that it was appropriate to convene a scheme meeting of a single class of scheme creditors. Meade J had noted at

¶ [42] of his judgment, the Company said, that the scheme creditors affected by sanctions had signed a lock-up agreement prior to their being sanctioned, and this strongly indicated that they did not object to the scheme. The Company submitted that the restrictions on the Blocked Noteholders’ right to attend and vote at the Scheme meeting, if relevant at all, related only to the fairness of the Scheme, which was not a question to be decided at the convening hearing. If the Blocked Noteholders had any objections to the Scheme, related to the effect of sanctions or the mechanisms put in place to deal with them, then they would be able to raise these objections at the sanction hearing. 68. I accept that the entitlement of Consenting Creditors to be paid the Instruction Fee does not require that they be put in a separate class. But in my view the proper approach to be followed by the Court was that set out by Marcus Smith J in Haya. He said this (at [72(4)] (underlining added): 28 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 FSD2022-0165 Page 28 of 55 2022-11-17 “Consent payment. A consent fee is payable to Scheme Creditors who acceded to the Lock-Up Agreement by 5pm on 31 March 2022 (the Consent Payment). The Consent Payment is a sum equal to 0.5% of the principal amount of the New SSNs to be received by the relevant Scheme Creditor under the Scheme. The Consent Payment will be payable in cash upon the implementation of the Scheme. Consent fees of this type are common, and at this level do not – given the value at risk - fracture the proposed class. Of course, this is a matter that is fact dependent, and the fees incurred in bringing forward a scheme, and the basis on which they are to be paid, are always going to be matters the court ought to bear in mind. More specifically: (a) Some of the authorities suggest that, where a consent fee is made available to all creditors in advance of the scheme meeting, it cannot fracture the class. If each creditor had a right to obtain the fee, then there is no difference in rights that is capable of fracturing the class: see Re HEMA UK I Ltd [2020] EWHC 2219 (Ch) and Re Swissport Fuelling Ltd [2020] EWHC 3064 (Ch) at [72] per Trower J, among many other cases. I am a little doubtful as to the weight of this point, since the critical question is how the class will vote at the meeting, and the factors that might impair that vote. (b) Some of the authorities suggest that even if a consent fee was made available to all, it is necessary to consider whether the quantum of the consent fee is material. On this view, if a consent fee would be unlikely to exert a material influence on the relevant creditors' voting decisions (having regard to the amount that creditors would receive in the comparator to the scheme and the value of the rights conferred by the scheme), then the fee does not fracture the class: see Re Primacom Holding GmbH [2013] BCC 201 at [57] per Hildyard J, among other cases. It is this, second, factor that is persuasive – at least in the present case, although I would be troubled if the potential for a consent fee were not available to all members of the class. To that extent, selectivity may be a negative factor, requiring of explanation. In the present case, all of the financial creditors were given an opportunity to sign the Lock-Up Agreement and receive the Consent Payment (if they acceded by 5pm on 31 March 2022). More importantly, the Consent Payment (which represents only 0.5% of the New SSNs to be received by the relevant Scheme Creditor) would not, in my judgment, exert a material influence on the Scheme Creditors' voting decisions. The difference between the “Scheme outcome” and the “comparator outcome” is far greater than 0.5% and it would be fanciful to suppose that anyone would vote for the Scheme in order to receive the Consent Payment.” 29 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 FSD2022-0165 Page 29 of 55 2022-11-17 69. The Court is required, when addressing the question of whether the class of Scheme Creditors has been fractured, to have regard to the rights given to Scheme Creditors pursuant to or in connection with the Scheme and consider whether there are material differences in those rights that prevent the Scheme Creditors from being able to consult together with a view to their common interest. It seems to me that rights have to be assessed at the date of the Scheme Meeting and include rights granted under documents that are entered into in connection with and for the purpose of obtaining creditor support for the Scheme. Accordingly, Consenting Creditors are to be treated as having different rights from other Scheme Creditors. But where all Scheme Creditors have been given an equal opportunity to obtain the consent fee (by acceding to a lockup agreement such as the RSA) and all Scheme Creditors are otherwise treated equally, the difference in rights is self-induced, in the sense that it arises from a choice made by those Scheme Creditors who have decided not to accede to the lockup agreement. Furthermore, the difference in rights is not of a kind that can reasonably be expected materially to affect Scheme Creditors’ decision making at the Scheme Meeting, if the amount of the consent fee is so small that no reasonable and properly informed Scheme Creditor would be likely to change his/her vote (to vote in favour of the scheme) because of the entitlement to be paid the consent fee or be likely to regard that entitlement as having a substantial effect on his voting decision. 70. In the present case, all Scheme Creditors were invited to become parties to the RSA. This included the Blocked Noteholders, a significant number of whom acceded to the RSA. The Instruction Fee is an amount equal to 1% of the aggregate principal amount of that Consenting Creditor’s Old Notes as at the Instruction Fee Deadline. The fee is not calculated by reference to the scheme consideration, as was the case in Haya, but that is not unusual or determinative. The amount of the Instruction Fee is not de minimis or trivial but it is not of such an amount that Scheme Creditors who are entitled to it can reasonably be expected to have a materially different view of the benefits of the Scheme over the alternative (an insolvent liquidation). There is no evidence to indicate, nor is the amount of the Instruction Fee inherently and of itself so large as to indicate, that a reasonable and properly informed Scheme Creditor would be likely to change his/her vote because of the entitlement to be paid the Instruction Fee or be likely to regard that entitlement as having a substantial effect on his voting decision. The Instruction Fee is being paid as an incentive for an early commitment to support the Scheme, 30 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 FSD2022-0165 Page 30 of 55 2022-11-17 and represents reasonable compensation for a commitment to support the Scheme in advance of the Scheme meeting. 71. It is also worth noting that the payment of a consent fee may also be relevant to a different issue at the sanction stage. If fees are paid to secure the support of Scheme Creditors and have the effect of manipulating the vote at the Scheme Meeting, such fees can affect and undermine the integrity of the vote and be a ground for refusing to sanction the scheme. But no issue on this ground arises in this case. 72. I accept the Company’s submissions with respect to the effect of the arrangements made in relation to the Blocked Noteholders’ Scheme consideration. As pointed out by Marcus Smith J in Haya there is a fundamental distinction between a scheme conferring different rights on different groups of creditors and a scheme conferring the same rights on all creditors but with some creditors being unable to enjoy those rights (immediately) by virtue of some personal characteristic that they possess. The latter situation should not fracture the class, as it involves a difference in interests rather than rights. Preventing Blocked Noteholders from attending or voting at the Scheme meeting 73. However, I do not accept that it would be permissible to deprive the Blocked Noteholders of the right to attend and vote at the Scheme meeting. While it might be said that by establishing arrangements and obtaining directions for the conduct of the Scheme meeting that prevented Blocked Noteholders (who were nonetheless Scheme Creditors whose rights were discharged and varied by the Scheme) from attending and voting, the Blocked Noteholders were being granted different rights from other Scheme Creditors under or in connection with the Scheme (so that they should be in a different class), it seems to me that this issue does not go to class composition. It goes to an even more fundamental point, namely the rights given by the Companies Act to parties to a scheme and to the fairness of the Scheme (leaving aside the 31 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 FSD2022-0165 Page 31 of 55 2022-11-17 impact of the Bill of Rights). It therefore raises an issue which might lead the Court to refuse to sanction the Scheme at the sanction stage. 74. Blocked Noteholders are unable to receive documents and give voting instructions via the clearing systems. There is no evidence that attendance of any Blocked Noteholder or voting by a Blocked Noteholder at the Scheme meeting would be unlawful and a breach of relevant sanctions. If that were the case, the position would be different. It is just that the usual method of communicating with and obtaining instructions from the ultimate and unidentified holders of the Old Notes is not available because of the effect of sanctions and the action taken by the clearing systems in response to such sanctions. 75. Parties to a scheme of arrangement whose rights are to be varied or discharged thereby are entitled to attend and vote at the Scheme meeting. In my view, that is what is envisaged and required by the relevant provisions of the Companies Act. 76. Section 86 of the Companies Act states that: “(1) Where a compromise or arrangement is proposed between a company and its creditors or any class of them … the Court may … order a meeting of the creditors or class of creditors …. to be summoned in such manner as the Court directs. (2) If a majority in number representing seventy-five per cent in value of the creditors or class of creditors as the case may be, present and voting either in person or by proxy at the meeting, agree to any compromise or arrangement, the compromise or arrangement shall, if sanctioned by the Court, be binding on all the creditors or the class of creditors as the case may be, and also on the company or, where a company is in the course of being wound up, on the liquidator and contributories of the company. 77. The Court is to summon a meeting of all those creditors who are made parties to the scheme and such creditors are entitled to vote. The Blocked Noteholders are to be made parties to the Scheme. They must be summoned to the Scheme meeting and allowed to vote. 32 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 FSD2022-0165 Page 32 of 55 2022-11-17 78. As I pointed out to the Company at the convening hearing, parties to a scheme must be given the right to vote on it and if there are practical problems which make it difficult for them or limit their ability to exercise that right and vote then the company must do (and must show that it has done) everything which it can reasonably be expected to do to give the scheme creditors concerned the opportunity to exercise the right to vote. In this case, it seemed to me that Blocked Noteholders could be given the opportunity to vote. They had already been notified of the Scheme and arrangements for the Scheme Meeting and could access the Scheme documents via the Company’s scheme website and it seemed to me that it must also be possible for the Company to make arrangements, as had been done with the RSA, for Blocked Noteholders to submit voting instructions and evidence of their status as Noteholders outside the clearing systems to suitable persons identified and appointed by the Company for the purpose. After the convening hearing, and following consultations with its advisers and the clearing systems, the Company confirmed that indeed this was possible and the Scheme documents and the arrangements for attendance and voting at the Scheme meeting were amended to allow Blocked Noteholders to attend and vote at the meeting. 79. The Company relied on the judgment of Meade J in Nostrum and it is worth noting precisely what the learned judge had said on this topic in his judgment (underlining added): “13. There are certain regulatory approvals that the Company must obtain in order to implement the Restructuring, which arise due to certain of the Scheme Creditors being direct or indirect targets of sanctions in the UK, EU or US. Such Scheme Creditors (“the Sanctions Disqualified Persons”) are currently prohibited from dealing with the Existing Notes. Approximately 7.1% by value of the Notes are held by Sanctions Disqualified Persons. 14. The Restructuring may require l icences to be granted by the sanctions authorities in the UK, the Netherlands and the US. I understand from Mr Allison QC, who appeared for the Company, that there is a possibility that the relevant authorities will indicate that no such licence is required (although this is less likely with the US). There is uncertainty as to when such licences (or confirmation that licences are not required) will be provided, which is why the moratorium is necessary to provide the Company with breathing room to implement the Restructuring. …. 33 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17 FSD2022-0165 Page 33 of 55 2022-11-17

¶ [42] Sanctions Disqualified Persons will not, because of their status as such, be able to vote on the Scheme. I note however that the (current) Sanctions Disqualified Persons signed up to the Lock-Up Agreement prior to their being sanctioned and this strongly indicates that they did not object to the Scheme and would be unlikely to do so now. 43. In any event, in my opinion the issue of sanctions relates, if anything, to the fairness of the Scheme, which is not a question I need to decide at this stage. I therefore agree with Mr Allison that the fact that there are Sanctions Disqualified Persons, and the mechanisms put in place to deal with sanctions, do not fracture the class. For completeness, I record that I slightly misunderstood the voting position in relation to Sanctions Disqualified Persons at the hearing because I was at cross-purposes with Mr Allison. The paragraphs above have been corrected following a helpful communication from the Company's Counsel after seeing my judgment. I am confident that my misunderstanding did not affect the result and I would have announced the same decision at the hearing anyway.” 80. It therefore appears that in Nostrum the Sanctions Disqualified Persons were prohibited by sanctions from dealing with their notes. That appears to have meant that it would have been unlawful for them to vote at the scheme meeting. That is not the position in this case. In addition, it appears that all the Sanctions Disqualified Persons had agreed to support and be bound by the scheme, so that their assent did not need to be established or confirmed by a vote at the scheme meeting. I do not need in this case to decide whether the Court would be willing to sanction a scheme where creditors who are made parties to the scheme cannot vote. I would say however that I am not currently satisfied that this is an issue which only goes to fairness. International effectiveness of the Scheme 81. At the convening hearing, the Court also needs to consider, at that stage on a preliminary basis, whether there is no point in convening a meeting of creditors because even if scheme creditors were to vote in favour and the Court were to sanction the scheme it would ultimately be ineffective since the scheme would not bind creditors and would be of no effect in other jurisdictions in which the company concerned had valuable assets or could be subject to insolvency proceedings (and there was a real risk that dissenting creditors might take action there). The Court will not act in vain and will not sanction a scheme which will not be substantially effective and achieve its core purpose. 34 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 FSD2022-0165 Page 34 of 55 2022-11-17 82. In this case the Old Notes are governed by New York law. While as a matter of Cayman law, the Scheme will be effective to discharge the Old Notes and Noteholders will be bound by the Scheme if sanctioned, the question arises as to whether the Scheme will be effective as a matter of New York law and whether Noteholders will be bound so that they cannot bring proceedings to enforce the Old Notes or to wind up the Company in another jurisdiction in which the Company has valuable assets or could be wound up (and whether there is a real risk that dissenting creditors would take such action). As I have noted, the Company is a holding company and its principal assets are the shares it holds in its subsidiaries, in particular Fangyou (a BVI incorporated company) and TM Home Limited (a Cayman incorporated company). 83. In order to ensure that the Scheme is binding and given effect as a matter of New York law, the Company intends to apply, if the Scheme is sanctioned, for relief under chapter 15 of the US Bankruptcy Code. As regards the prospects of obtaining and the effect of chapter 15 relief the Company relied on Judge Gropper’s evidence. Judge Gropper, as I have noted, is a hugely experienced and highly respected former US Bankruptcy Judge for the Southern District of New York. He summarised his evidence at [9] and [10] of his Affidavit as follows: “9. I have been asked to state whether in my opinion (i) a United States Bankruptcy Court with appropriate jurisdiction, including the United States Bankruptcy Court for the Southern District of New York, would recognize the Cayman Islands' judicial process of obtaining approval of the Scheme (the "Proceeding") as a foreign main proceeding under chapter 15; (ii) relief could be obtained to ensure that the Scheme would be enforced in the United States, given the Indentures are governed by New York law, and in accordance with such principles, a creditor would or could be prevented from bringing legal proceedings in the United States against the Company in contravention of the terms of the Scheme; (iii) the grant of appropriate relief in the chapter 15 proceeding would have the effect of substantively discharging the Notes affected by the Scheme for the purposes of U.S federal and state law; and (iv) the third-party waivers and releases and exculpation provisions set out in substantially the same form as the draft Scheme would be enforceable in the United States. I have also been asked to address whether the Cayman Islands would be recognized as the center of main interests ("COMI") of the Company such that the Proceeding would be 35 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 FSD2022-0165 Page 35 of 55 2022-11-17 recognized as a "foreign main" proceeding under chapter 15 of the Bankruptcy Code. 10. Based on the facts provided in the documents identified below and the analysis set forth herein, and subject to the qualifications stated, it is my opinion that (i) the Cayman Proceeding would be recognized as a “foreign main proceeding” under chapter 15 of the Bankruptcy Code; (ii) the Scheme will be effective in the United States in practice to bind Scheme Creditors in relation to the variation of their rights; (iii) relief in the chapter 15 proceeding would have the effect of substantively discharging the Notes and related guarantees for the purposes of U.S. Federal and State law; and (iv) the third-party waivers, releases and exculpation provisions set out in substantially the same form as the draft Scheme will be enforceable in the United States. I can also confirm that principles of international comity remain important considerations for courts in the United States when considering applications to give effect in the United States to foreign proceedings.” 84. Judge Gropper’s Affidavit sets out a fully reasoned analysis with reference to relevant authorities to support his conclusions. He dealt in depth with the test under the chapter 15 jurisprudence for determining COMI and said this at [24]: “Based on the statute as construed by the cases discussed above, it is my opinion that the Proceeding in the Cayman Islands would be recognized by a U.S. bankruptcy court as a foreign main proceeding. As stated above, section 1516(c) of chapter 15 provides that the place of registration is presumed to be the debtor's COMI, and in the instant case we must start with the presumption that the Cayman Islands is the COMI. This presumption may be rebutted, but here there would be insufficient grounds to do so. The Cayman Islands is undoubtedly the “center of the Company's interests”, taking into account the words of the statute as written. Indeed, the Company’s future as an entity depends on its efforts to restructure debt that is in default. These efforts are all centered in the Cayman Islands - in the petition to this Court to convene a Scheme Meeting, in that the Scheme Meeting will take place in the Cayman Islands, and in this Court sanctioning the Scheme. I am informed that noteholders who wish to contact the Company in relation to the restructuring and/or the Scheme will be informed through a practice statement letter that they may do so by contacting A&M, a service provider located in the Cayman Islands by: (i) writing to a Cayman Islands address; (ii) sending an email to a Cayman Islands email address; or (iii) by telephoning A&M on a Cayman Islands telephone number. In any event, by the date of the filing of the chapter 15 petition, which is the critical date for chapter 15 purposes, the Company’s very existence will depend on activities centered in the Cayman Islands.” 36 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 FSD2022-0165 Page 36 of 55 2022-11-17 85. Judge Gropper relied in particular on the decision of the Second Circuit Court of Appeals in Morning Mist Holdings Ltd v Kris 714 F.3d 127 (2d Cir. 2013) (Morning Mist) and noted that his conclusions were strongly supported by the recent decision of Judge Glenn, the Chief Judge of the Bankruptcy Court for the Southern District of New York, in In re Modern Land (China) Co., Ltd 2022 WL 2794014 (Bankr. S.D.N.Y, July 22, 2022) (“Modern Land”). He said this about that decision: “My conclusions as set forth above are strongly supported by the Modern Land decision of Judge Glenn discussed above. In a case involving a company with many relevant similarities to the Company here, the Court held that recognition as a foreign main proceeding would be consistent with the goals of chapter 15, with creditors’ expectations and with choice of law principles, among other things. The Court also stressed that the judicial role in that proceeding, like the instant proceeding, was prevalent and that it would not imply the requirement that provisional liquidators or their equivalent would be required in order to meet the standards for recognition. 2022 WL 27940 at *13-14. 86. In Judge Gropper’s opinion, the third party releases in the Scheme would not preclude the US Bankruptcy Court from granting relief under chapter 15 and that the relief which would be granted would include both recognition and enforcement of the discharge effected by the Scheme. The US Bankruptcy Court would “give full force and effect” to the provisions of the Scheme. 87. Judge Gropper also referred to the judgment of Mr Justice Harris in Hong Kong in In re Rare Earth Magnesium Technology Group Holdings Limited [2022] HKCFI 16896 (Rare Earth). Rare Earth was a case involving a Hong Kong scheme in respect of a company incorporated in Bermuda which sought to discharge debt governed by Hong Kong law. But the learned judge made some comments regarding the approach of the Hong Kong courts to the effect and recognition in Hong Kong of chapter 15 relief granted by US Bankruptcy Courts in respect of schemes sanctioned in “offshore jurisdictions” which discharged New York law debt. Mr Justice Harris said as follows: “31. A creditor could not take enforcement action within the United States as a consequence of recognition of the scheme under Chapter 15 and granting by the relevant Bankruptcy Court of ancillary relief which prohibited 37 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 FSD2022-0165 Page 37 of 55 2022-11-17 enforcement in the United States. As the offshore jurisdictions apply the Rule in Gibbs, such a scheme might not be effective to compromise the debt of a creditor, who has not submitted to the jurisdiction of the Hong Kong court. Whether or not it is necessary to introduce a parallel scheme in the offshore jurisdiction will depend on the factors that I consider in [23]–[29] of China Oil. 32. A scheme sanctioned in an offshore jurisdiction and recognised under Chapter 15 in the United States will not be treated by a Hong Kong court as compromising US$ debt. The Rule in Gibbs requires the substantive alteration of contractual rights to be sanctioned by some substantive provision of the relevant law. In the insolvency context in the United States this is I understand is achieved under Chapter 11 of United States Bankruptcy Code. This is explained by Glenn J (who dealt with the Chapter 15 application in Winsway) in his judgment in In re Agrokor d.d. In pages 184 to 185 Glenn J explains the position as follows: “The Supreme Court concluded in Tennessee Student Assistance Corp. v. Hood, 541 U.S. 440, 447, 124 S.Ct. 1905, 158 L.Ed.2d 764 (2004), that the discharge of debt in a U.S. bankruptcy proceeding is proper because it is an in rem proceeding. A single court should resolve all claims to property of the debtor, which necessarily requires that the court resolve all creditor claims that have been, or could have been, asserted, provided that the creditors have received the notice required by due process. Thus, in an in rem proceeding, personal jurisdiction over all creditors is not required; the court determines the creditors’ rights to receive distributions from all property of the debtor that is part of the estate. A creditor cannot ignore or avoid a Chapter 11 case and later sue to recover on its prepetition claim. Upon confirmation of a Chapter 11 plan, section 1141 (d)(1)(A) discharges the debtor from any debt that arose before the date of confirmation, whether or not the creditors filed a proof of claim or accepted the plan…” 33. As a matter of United States law a confirmed Chapter 11 plan operates to discharge the existing debt of a debtor and replace it with a right to receive a distribution in accordance with the confirmed plan. This is also the effect of a sanctioned scheme. Glenn J goes on at the end of the paragraph I have quoted to refer to the same principles applying to recognition of a foreign insolvency process with the same consequences, however, it is clear from reading the judgment as a whole that recognition under Chapter 15 does not operate as a discharge and that Glenn J acknowledges this. 34. On page 185 Glenn J introduces an objection to recognition based on the fact that some of the debt compromised by the arrangement Glenn J was asked to 38 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 FSD2022-0165 Page 38 of 55 2022-11-17 recognise was governed by English law and the arrangement arose under Croatia’s Act of the Extraordinary Administration Proceedings in Companies of Systemic Importance of the Republic of Croatia. “From the record before this Court—particularly since no objections have been filed—the Court concludes that the Croatian Proceeding was procedurally fair, provided proper notice to all creditors and, through the Settlement Agreement, determined the rights of all creditors to property that was subject to the jurisdiction of the Croatian Court. Is there any reason, then, not to recognize and enforce the Settlement Agreement within the territorial jurisdiction of the United States? This Court believes there is not. Nonetheless, the issue (of whether recognition of the entire Settlement: Agreement is appropriate within the territorial U.S.) arises because of the English courts’ enforcement of the Gibbs rule, discussed below, which could lead an English court to conclude that certain aspects of the Settlement Agreement cannot be enforced in England against creditors holding English law governed debt. Such a refusal of the English court to enforce parts of the Settlement Agreement would most certainly cause the Settlement Agreement to fall considering the amount of prepetition debt governed by English law. That would be unfortunate, indeed.” 35. The material distinction between Chapter 11 and Chapter 15 proceedings is explained on page 187: “Section 1520 details the mandatory relief that is automatically granted upon recognition of a foreign main proceeding under Chapter 15. 11 U.S.C. § 1520. Section 1520(a)(1) provides that the automatic stay will apply to all the debtor’s property that is located within the territorial jurisdiction of the United States. The statute refers specifically to the property of the debtor, as opposed to the property of the estate, since there is no estate in a Chapter 15 case. See, e.g., Atlas Shipping, 404 B.R. at 739. Despite this difference, the automatic effect of recognition of a foreign main proceeding under section 1520(a) is an imposition of an automatic stay on any action regarding the debtor’s property located in the United States. Id.” (emphasis added) 36. It is clear from this passage that recognition under Chapter 15 operates procedurally to prevent action by a creditor against a debtor’s property in the United States. Recognition does not appear as a matter of United States’ law to discharge the debt. Consistent with this at page 196 Glenn J states that it is appropriate to extend comity within the territorial jurisdiction of the United States. Unlike a discharge under Chapter 11 which purports to have 39 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 FSD2022-0165 Page 39 of 55 2022-11-17 worldwide effect, recognition under Chapter 15 is limited in territorial effect and I think it is reasonable to assume that the reason for this is that the procedure does not discharge the debt. 37. There is a distinction between a court treating a compromise as having the substantive legal effect of altering the legal rights of the parties to an agreement (the issue with which Gibbs is concerned) and a court within its jurisdiction recognising, pursuant to a process such as Chapter 15, the purported legal consequence of a foreign insolvency procedure. This is a distinction to which advisers need to be alert when dealing with transnational restructuring. A scheme in an offshore jurisdiction purporting to compromise debt governed by United States law will not be effective in Hong Kong. Recognition of the scheme under Chapter 15 does not constitute a compromise of debt governed by United States law, which satisfies the Rule in Gibbs. The result is that if a company has a creditor, which did not submit to the jurisdiction of the offshore court the creditor will be able to present a petition in Hong Kong to wind up the Company and if, for example, the creditor is a bond holder whose debt is not disputed, obtain a winding up order unless the debt is settled. I note that there appears to be a surprisingly large number of Mainland business groups listed in Hong Kong, whose US$ denominated debt has recently been subject to schemes only in offshore jurisdictions and recognition under Chapter 15. It may be that all the creditors of these companies, which hold debt of any material value have agreed to the terms of the compromise, but if that is not the case such companies, and any that might adopt a similar model in future, will be at risk of a petition being presented against them in Hong Kong and being wound up here. An offshore scheme and Chapter 15 recognition will not protect them. 88. Judge Gropper noted that Judge Glenn in Modern Land had considered that Mr Justice Harris’ summary of applicable US law had not been correct. Judge Gropper made the following comments in his Affidavit (at [19]) (underlining added): “In regard to these issues, mention should be made of the recent decision of a Hong Kong Court in a case captioned In the Matter of Rare Earth Magnesium Technology Group Holdings Limited, [2022] HKCFI 1686. There, the Court, taking it upon itself to construe United States law and quoting from the decision in the Agrokor case cited above, stated in dictum that it did not believe that an order under chapter 15 recognizing and enforcing a foreign proceeding discharges the underlying debt. With respect, I believe the Court's discussion of chapter 15 and its effect erred, and Judge Glenn, the author of the decision in Agrokor, stated his disagreement with the Hong Kong decision in his recent decision in Modern Land. Judge Glenn said that the Hong Kong Court had misinterpreted his Agrokor decision and, in the plainest terms, said: 40 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 FSD2022-0165 Page 40 of 55 2022-11-17 “To be clear in recognizing and enforcing the Scheme in this case, the Court concludes that the discharge of the Existing Notes and issuance of the replacement notes [in Modern land’s Cayman scheme] is “binding and effective.” 2022 WL 2794014 at *5 (footnote omitted).” Therefore, as stated above, it is my opinion that an order of a court in a foreign insolvency proceeding under chapter 15 that meets the requirements of chapter 15 will be enforced in the United States and the relief granted will have the effect of discharging the debt and releasing guarantee claims against the Old Notes Subsidiary Guarantors for U.S. purposes, regardless of whether the debt is governed by U.S. law. If a court in Hong Kong or elsewhere refuses, for whatever reason, to give similar effect to a foreign scheme or liquidation, it will do so for its own reasons, not because of any issue arising under chapter 15 or other provision of U.S. law.” 89. The Company also relied on an opinion on Hong Kong law provided by Mr Ian De Witt, a partner in Tanner De Witt and a solicitor qualified in Hong Kong. His opinion dated 19 August 2022 was exhibited to Zhou 1. Mr De Witt opined (as I understood it) that if the Old Notes were treated as discharged in accordance with New York law, they would be treated as discharged as a matter of Hong Kong law. He relied on Judge Gropper’s evidence for the proposition that the relief to be granted on the Company’s application under chapter 15 would discharge the debts under the Old Notes and the obligations of the Subsidiary Guarantors and that therefore that such discharge would also be given effect under the law of Hong Kong as a result of the well-known rule in Anthony Gibbs and Sons v La Societe Industrielle et Commercial des Metaux (1890) 25 QBD 399 (Gibbs). As regards Rare Earth, Mr De Witt noted that Mr Justice Harris’ “analysis [did] not accord with the opinion given by [Judge] Gropper” and that: “In any event, the potential impact of Harris J’s decision in respect of the effect of a Chapter 15 recognition is minimal as his statements are obiter and non-binding. This is because: (a). The debts compromised by the scheme of arrangement in [Rare Earth] did not concern any United States governed law debts….. It is unclear [how the effect of chapter 15 relief in a case involving the discharge of New York law debts by a foreign scheme] arose in the written decision. (b). It is not apparent from the written decision that his Lordship considered any expert opinion on New York law. 41 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 FSD2022-0165 Page 41 of 55 2022-11-17 (c). The sanction of the scheme of arrangement in [Rare Earth] was unopposed, thus any expert opinion adduced by the scheme company would not have been challenged.” 90. At the convening hearing I asked where the restructuring negotiations had taken place and Mr Herrod confirmed that they had largely taken place in the PRC including Hong Kong. I then asked whether this was a fact that Judge Gropper had considered and whether this might be relevant to his assessment of the location of the Company’s COMI. Mr Herrod said that this was a matter that the Company would raise with Judge Gropper in advance of the sanction hearing. 91. Further, the Company also relied on the advice it had received from Maples’ BVI attorneys as to applicable BVI law. In an email dated 5 August 2022, Mr Matthew Freeman, a partner of Maples in the BVI, noted that two of the Subsidiary Guarantors were incorporated in the BVI and that their guarantees were governed by New York law. He confirmed that in his opinion if sums due under the Old Notes and liability under the guarantees were discharged in accordance with New York law, then such discharge would be given effect in the BVI. 92. In view of these opinions and advice, I was satisfied that there were good grounds for concluding (and that it was reasonably likely) that the discharge effected by the Scheme would be given effect and be binding on Scheme Creditors under and as matter of New York law. It appeared that the Company would be seeking, following and in the event of the sanction of the Scheme, an order from the Bankruptcy Court for the Southern District of New York under chapter 15 (or pursuant to New York private international law applying comity) to the effect that the Released Claims would be treated as discharged under and as a matter of New York law and that there were good grounds for concluding (and that it was reasonably likely), based on Judge Gropper’s evidence and recent authority (Modern Land), that the New York court would grant such relief. 93. It also appeared that there were good grounds for concluding (and that it was reasonably likely) that, applying the chapter 15 jurisprudence to the facts of the present case, the Company’s COMI is to be treated in the Cayman Islands at the date of the filing of its chapter 15 petition. 42 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 FSD2022-0165 Page 42 of 55 2022-11-17 94. I was also satisfied that in these circumstances, and applying Gibbs, the discharge under and resulting from the Scheme should be given effect and recognised as a matter of Hong Kong and BVI law. However, I recognise and respect the fact that Mr Justice Harris has taken a different view of the effect of relief under chapter 15 and do not disregard the importance of the dicta in his judgment in Rare Earth. It seemed to me that Mr De Witt had rather too heavily discounted the significance of those dicta. Nonetheless, in view of the clear decision of Judge Glenn in Modern Land and the strong opinion of Judge Gropper in his evidence in this case, I concluded that there were good grounds for concluding that a properly drafted order (which confirmed that the relevant debt was treated as discharged by the Scheme) did mean that under and as a matter of the law of New York the Released Claims would for all purposes be regarded as discharged and extinguished by the Scheme so that for the purpose of the rule in Gibbs the Released Claims would treated as having been discharged and extinguished in accordance with, as a matter of and under their proper law. I also concluded that Mr Justice Harris may wish (of course recognising that this is a matter entirely for him and the Hong Kong court) at least to review and revisit his analysis of the effect of relief under chapter 15 (with the benefit of Judge Glenn’s opinion and in light of the terms of the orders made by the US court) and that, while the issue was likely to come before and require further consideration by the Hong Kong courts, the evidence before me was that the discharge of the Old Notes and the liabilities of the Subsidiary Guarantors under the Scheme would be effective in and under New York law and therefore should be given effect in Hong Kong law (once again recognising that it is for the Hong Kong court to determine questions of Hong Kong law and not for this court to do so). I can see that it might be the case that the Hong Kong court would wish to form its own view and be entitled to make its own decision as to the location of the Company’s COMI when deciding whether itself to give common law assistance to Cayman appointed provisional liquidators or liquidators but it was not argued nor does it seem to me to be right to say that when the Gibbs rule is being applied the Hong Kong court can or should go behind and mount a collateral attack on the New York court’s finding with respect to COMI and its order granting chapter 15 relief. 43 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 FSD2022-0165 Page 43 of 55 2022-11-17 95. The position is the same as a matter of BVI law, which is clearly of considerable practical significance in this case since the Company has assets (shares in a major subsidiary) and two of the Subsidiary Guarantors are incorporated there. Adequacy of the Explanatory Statement 96. I was generally satisfied that the Explanatory Statement provided adequate disclosure to Scheme Creditors. However, there were three issues which arose. 97. First, I noted that the Explanatory Statement did not provide Scheme Creditors with any details of the costs of the restructuring and Scheme process. It seemed to me that Scheme Creditors should have this information and I directed that it be provided. 98. Second, there was an issue whether the financial information contained or referred to in the Explanatory Statement was sufficiently up to date or could be considered to be stale, and whether audited financial statements should have been included. I have explained above the financial information which the Company included and referred to and the Company’s explanation as to why it had not been possible or practicable to include audited financial statements or more recent financial information. I was satisfied that in the circumstances the financial information was sufficiently up to date to allow Scheme Creditors to make a properly informed decision as to how to vote on the Scheme and that the Company’s explanations as to why audited financial statements were not available was reasonable. 99. Thirdly, there was an issue as to whether Kroll’s liquidation analysis had been properly prepared and was sufficiently reliable. As I have noted, Kroll’s liquidation analysis was not based on a company by company analysis of the likely outcome of a liquidation of each company. Instead Kroll adopted what they described as a segmented based approach under which Kroll put the Group’s over three hundred companies into six sub-groups (segments) and aggregated the assets and liabilities of each sub-group (segment) for the purpose of estimating their estimate of the return to creditors of each company in the sub-group in the event of a liquidation of all the companies concerned. Kroll assumed that it was sufficient to give Scheme Creditors an analysis that based estimated returns for creditors of each company in a sub-group 44 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 FSD2022-0165 Page 44 of 55 2022-11-17 on the pro rata amount that all creditors of all companies in the sub-group would receive if the proceeds from realisation of all assets of all such companies were aggregated and distributed among all such creditors to discharge the aggregate of all liabilities of all such companies. It appears that membership of the sub-groups was based on the companies concerned being part of the same business sector. I did have some concerns about this methodology which did not appear to be based on the impact of intercompany indebtedness between particular companies (a company in one segment might owe or be owed large sums by a company in another segment so that value would flow from or to such companies otherwise than through the segment) but concluded that it was not wholly unreasonable to assess the impact of the liquidation of a company by reference to and with the effect of a liquidation of other companies operating in the same business sector and that Kroll’s approach was reasonable having regard to the number of companies concerned and the need to establish a workable and cost-effective methodology for the liquidation analysis. Directions for the convening and conduct of the Scheme meeting 100. I was satisfied that the arrangements for convening and conducting the Scheme meeting were satisfactory. The Scheme meeting was to take place in the Cayman Islands at a time and in a manner that would allow Scheme Creditors from across the world, in particular from Asia, the UK and the US east coast to participate. Scheme Creditors were able to attend and vote at the Scheme Meeting by video conference using dial-in details which could be obtained on request from the Information Agent. Scheme Creditors who attended via video conference would be able to see and hear and be seen and heard by other Scheme Creditors attending the Scheme meeting so as so ensure that there would be an adequate "coming together" of Scheme Creditors and an ability for them to consult among themselves (see Trower J’s judgment in Re Castle Trust Direct PLC [2021] BCC 1 at [42]). At the convening hearing I indicated that it would be necessary for the chairperson at the Scheme meeting to confirm in his report to the Court on the outcome of the Scheme meeting for the purpose of the sanction hearing that the technology had worked properly and that Scheme Creditors were in fact able to see and hear each other and consult in this way. 45 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 FSD2022-0165 Page 45 of 55 2022-11-17 101. As I have noted, following the convening hearing the Convening Order was amended to allow the Blocked Noteholders to attend and vote at the Scheme meeting. A form of voting form (the Blocked Scheme Creditor Voting Form) was prepared for use by the Blocked Noteholders and the Convening Order provided that votes cast by Blocked Noteholders using the Blocked Scheme Creditor Voting Form were to be counted by the chairperson at the Scheme meeting. The outcome of the Scheme meeting 102. The Scheme meeting was duly held on 2 November 2022 in accordance with the terms of the Convening Order and the Scheme Creditors in attendance at the Scheme Meeting overwhelmingly approved the Scheme. Of those Scheme Creditors present and voting at the Scheme Meeting, 99.96% by value and 99.87% by number voted in favour of the Scheme. In particular, of those Blocked Noteholders present and voting at the Scheme meeting, all Blocked Noteholders voted in favour of the Scheme and none voted against. All of the Blocked Noteholders who voted in favour of the Scheme were Consenting Creditors. Further amendment to the Scheme 103. Shortly before the sanction hearing, the Company filed Zhou 6. In that affirmation, Mr Zhou explained that Deutsche Bank AG, Hong Kong, who has been engaged to act as the New Depository, had recently informed the Company that it would not sign the deed of undertaking on the basis that it had no direct contact with the Company. Its role and relationship was only with the clearing systems. Mr Zhou said that Deutsche Bank AG had no obligations under the Scheme and so did not need to be party to the deed of undertaking. Nonetheless, it had been necessary to amend the form of deed of undertaking to remove Deutsche Bank AG as a party and to make minor amendments to the Scheme to reflect the fact that Deutsche Bank AG would not be a party. The Company indicated that it would be seeking the sanction of the Scheme with this amendment and submitted, and I accept, that it had the power to make this minor change pursuant to clause 17 of the Scheme. Longstop Date 46 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 FSD2022-0165 Page 46 of 55 2022-11-17 104. At the sanction hearing, the Company confirmed that it would be exercising the power under clause 10.1(a) of the Scheme of extending the Longstop Date to 14 December 2022 and would, if the Scheme was sanctioned, give notice to this effect to Scheme Creditors in the Scheme Effective Notice. The issues arising at the sanction hearing 105. In my judgment in Re Freeman FinTech Corporation Ltd (unreported, 4 February 2021) (Freeman FinTech) I set out and summarised the law regarding the function of, and the approach to be adopted by, the Court at the sanction hearing (see [16] – [17]). I also set out the approach to be taken where there were issues as to the international effectiveness of the scheme (see [31]). I also note that the approach to be adopted and issues to be considered by the Court at the sanction hearing were well summarised even more recently by Mellor J when sanctioning the scheme in Re Nostrum [2022] EWHC 2249 (Ch) at [15] – [18].

¶ [106] The issues to be considered can be summarised as follows: (a). first, that the Company has complied with the terms of the Convening Order and the Further Convening Order in convening the Scheme meeting and that the requisite statutory majorities under section 86(2) of the Companies Act were achieved at the Scheme meeting (Issue One). (b). secondly, that the class of Scheme Creditors was fairly and adequately represented by those who attended the Scheme meeting and that the statutory majorities were acting bona fide and not coercing the minority in order to promote interests adverse to those of the class whom they purported to represent (Issue Two). (c). thirdly, that the Scheme is a scheme of arrangement that is fair, in the sense that an intelligent and honest person, being a member of the class concerned and acting in 47 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 FSD2022-0165 Page 47 of 55 2022-11-17 respect of his/her interest, might reasonably approve of it and that, as a matter of its residual discretion, the Court should sanction the Scheme (Issue Three). (d). fourthly, that there is no other blot or defect in the Scheme which would warrant the Court refusing to sanction the Scheme (Issue Four). (e). fifthly, in the case of a scheme with an international element, that the Court will not be acting in vain if it sanctions the Scheme. This requires consideration of whether the scheme will be recognised and given effect in other relevant jurisdictions. This was, as I have noted above, addressed in a preliminary way without the benefit of the results of the Scheme Meeting, at the convening hearing but needs to be reviewed again at the sanction stage (Issue Five). Issue One 107. As regards Issue 1, I am satisfied that the additional evidence filed by the Company in advance of the sanction hearing demonstrates that the Scheme meeting was convened and conducted in accordance with the Convening Order and the Further Convening Order (and was quorate). I note in particular the evidence in Zhang 1 regarding the effectiveness of the video conference facilities. All Scheme Creditors who could not, or did not, wish to attend at the Scheme meeting venue including the Blocked Noteholders who were invited to vote by lodging duly completed Blocked Scheme Creditor Voting Forms and to attend the Scheme meeting, provided that they were able to have their identity/authority, status as Noteholder, and the size of their note holding verified by the Company prior to the Scheme Meeting. CICC provided and hosted the video conference facilities for the Scheme meeting using Zoom. One Scheme Creditor attended the Scheme meeting by video conference and no Blocked Noteholders indicated they would like to attend or attended the Scheme meeting. The person who joined via video conference could see and hear the proceedings at the Scheme Meeting venue, they could see each other and be seen by those at the Scheme Meeting venue and had the opportunity to ask questions or express opinions by using the chat function. 48 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 FSD2022-0165 Page 48 of 55 2022-11-17 Issue Two 108. The Court is bound to assess whether the vote at the Scheme meeting was representative of the class of Scheme Creditors. In Re BTR plc [2000] 1 BCLC 740 at 747 Chadwick LJ stated that: "The way in which Parliament's intention is to be given effect – as it seems to me and as it has seemed to judges over the century or so since Bowen LJ considered the matter in 1892 – is that the court is not bound by the decision of the meeting. A favourable resolution at the meeting represents a threshold which must be surmounted before the sanction of the court can be sought. But if the court is satisfied that the meeting is unrepresentative, or that those voting in favour at the meeting have done so with a special interest to promote which differs from the interest of the ordinary independent and objective shareholder, then the vote in favour of the resolution is not to be given effect by the sanction of the court. That, as it seems to me, is the check or balance which Parliament has envisaged." 109. Similarly, in Re The Scottish Lion Insurance Co Ltd [2010] SCLR 107 at [37] Lord Glennie stated that: "[T]he grounds upon which an opposing creditor may seek to oppose the scheme are clearly wider than perversity, dishonesty and irrationality. The opposing creditor is entitled to seek to prove that the voting was unfair, unrepresentative or affected by special interests." 110. I accept the Company’s submission that in this case there is no reason to believe, and no evidence, that the views of those Scheme Creditors who voted at the Scheme meeting do not fairly represent the views of the Scheme Creditors as a whole. Neither is there any reason to believe or evidence that they were not acting bona fide or that they were being coerced. Issue Three 111. The Court must also be satisfied that the proposed Scheme is fair such that as a matter of discretion it is appropriate to sanction the Scheme. Putting the same point another way, the 49 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 FSD2022-0165 Page 49 of 55 2022-11-17 Court must be satisfied that an intelligent and honest person, a member of the class concerned and acting in respect of his own interest, might reasonably approve the scheme. 112. In Re SPhinX Group of Companies, [2014] (2) CILR 152 at [3] Chief Justice Smellie summarised the role of the Court at the sanction hearing as follows: "At the third stage of the process, it is apparent that the role of the court is a limited one. Although it is often referred to as the stage at which the court will consider issues relating to the "fairness" of the proposed scheme, the task of the court at the sanction stage is not to pass its own subjective judgment on the merits of a scheme. The court takes the view that in commercial matters, members or creditors are much better judges of their own interests than the court." 113. In applying this test, the Court is required to consider the relevant comparator to the Scheme. In the present case, the evidence shows that the Scheme is likely to produce or at least facilitate a considerably better recovery for Scheme Creditors than a liquidation. 114. It seems to me that the Scheme is obviously one that an intelligent and honest person, a member of the class concerned and acting in respect of his own interest, might reasonably approve. The commercial purpose of the Scheme was clearly explained in the Explanatory Statement and it appears that the Scheme offers material benefits to Scheme Creditors. Furthermore, Scheme Creditors have, both as regards the terms of and the procedure of voting on the Scheme, as a result of the directions given to permit Blocked Noteholders to attend and vote at the Scheme meeting, been treated fairly and I see nothing unfair in the Company agreeing to pay the Instruction Fee only to Consenting Creditors. 115. I also accept the Company’s submission that the arrangements relating to the Holding Period Trust and, potentially, the Successor Trust for Blocked Noteholders are necessary, reasonable and fair in the circumstances. As the Company pointed out, the structure it adopted mirrors and responds to the block currently imposed by the clearing systems. The position of the Blocked Noteholders under the Scheme is no different from their position as holders of the Old Notes in that they are unable to receive consideration until that block is lifted. Furthermore, the Company has not arbitrarily imposed this structure on the Blocked Noteholders but explored, 50 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 FSD2022-0165 Page 50 of 55 2022-11-17 under considerable time pressure, a number of alternatives. The Company will be able to review the status of sanctions and the position of Blocked Noteholders after three years at the end of the Holding Period Trust and before setting up and if required transferring the Blocked Noteholders’ Scheme consideration to the Successor Trust. I also note that none of the Blocked Noteholders have objected to these arrangements. Issue Four 116. The Court must also be satisfied that there is no blot on or defect in the Scheme that would warrant refusal to sanction the Scheme. I accept the Company’s submission that no question of a blot or other defect arises in this case. Issue Five 117. In Freeman FinTech I explained at [31] the Court’s approach when considering the international effectiveness issue: “31. In my view, the following points summarise the approach which the Court should adopt in the present and similar cases: (a). the Court needs to take into account all relevant circumstances when deciding whether to exercise its discretion to sanction the scheme. (b). the Court needs to be provided with evidence as to the circumstances and in particular the realistic risks arising from and associated with the creditor not being bound by the scheme or the sanction order. This was why in this case I required further evidence to be provided as to whether the Company had considered whether the Macau Creditor could obtain a judgment in a jurisdiction in which the Cayman Scheme was not recognised and enforce that judgment or otherwise obtain execution in a jurisdiction in which the Company had assets and which would also not recognise the Cayman Scheme. I indicated that there should be evidence as to the nature and extent 51 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 FSD2022-0165 Page 51 of 55 2022-11-17 of the risks associated with having a creditor, who is owed a not insubstantial sum, left outside and not bound by the Cayman Scheme. In this connection, I note the following comments of Snowden J in Van Gansewinkel Groep BV [2015] EWHC 2151 (Ch) at [71], after referring to Sompo Japan (underlining added): “In cases such as the present, the issue is normally whether the scheme will be recognised as having compromised creditor rights so as to prevent dissenting creditors from seeking to attach assets of the scheme companies in other countries on the basis of an assertion of their old rights. The English court does not need certainty as to the position under foreign law—but it ought to have some credible evidence to the effect that it will not be acting in vain.” (c). the Court needs to consider whether on the evidence it is appropriate to sanction the scheme despite and having regard to the risks of enforcement action by creditors who are not bound and are likely to be able to take action in other jurisdictions. This assessment will be made in light of the location of the company’s assets and the impact of any enforcement action (including any winding up proceedings in other jurisdictions) on the implementation of the scheme and company in the future (in so far as that may impact the recovery and rights of creditors and others under the scheme). The Court will consider, as Lloyd J put it in his judgment at first instance in Garuda (2001 and WL 1171948, which was upheld by the Court of Appeal) the “risk of disturbance.” In appropriate cases, the fact that significant claims may not be bound by the scheme may not prevent the Court sanctioning the scheme where there are clear and real benefits that will be derived from the scheme and which are unlikely to be disturbed by hostile action following sanction. In Sompo Japan, a case involving an insurance business transfer scheme where what mattered most was the effectiveness of the transfer, the evidence established that only something over 27% of the policies in number and by reference to reserves were governed by English law. Nonetheless, since it was reasonable to suppose that the transfer would be effective in any relevant jurisdictions as regards those policies, the scheme would achieve a substantial purpose, irrespective of the fact that it also extended to a larger class of business not governed by English law. If the scheme is likely to be effective to a substantial extent and provide parties with the benefits they anticipated to a substantial or material extent, the Court will be likely to sanction the scheme despite some creditors not being bound and the risk of enforcement action by them. But the Court will wish carefully to consider the risks in each case. It will be relevant that the creditor or creditors in question had indicated support for the scheme and an intention not to take action, as was the case in China 52 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 FSD2022-0165 Page 52 of 55 2022-11-17 Lumena, or that there was evidence of foreign law that the courts in other relevant jurisdictions were unlikely to act inconsistently with the scheme, as in Garuda. (d). it also seems to me that the Court needs to consider the issue of fairness in this context. If those who are bound by the scheme have accepted a haircut or other variation or discharge of their rights and claims, it may be unfair to sanction the scheme and hold them to the terms of the scheme if there is a serious risk that other creditors will be able to enforce their pre-scheme claims in full or to a substantial extent (or subsequently negotiate a payment or recovery above that received by Scheme Creditors under the scheme). It may be relevant in this context to have regard to the extent to which creditors were made aware of the risks in the explanatory statement before voting, as in Garuda.” 118. I have already discussed at some length the approach I took to this issue at the convening hearing. But something further briefly needs to be said on the point since the Company filed further evidence from Judge Gropper after the convening hearing, the outcome of the Scheme meeting is now known and the issue falls to be reconsidered and assessed in the context of the exercise of the Court’s discretion to sanction the Scheme. 119. On 28 September 2022 Judge Gropper wrote a letter to the Company, which was adduced into evidence by being exhibited to Zhou 5. In that letter Judge Gropper confirmed that he had been told that the restructuring negotiations leading to the proposed Scheme had taken place in the PRC including Hong Kong and that his opinions and conclusions set out in his Affidavit were unaffected. He noted, inter alia, that in Morning Mist the critical factor confirming that BVI was the COMI of the company was the fact that the scheme was considered and sanctioned there. Judge Gropper also noted the criticisms of the decision by Professor Jay Westbrook, a well–respected academic and bankruptcy law specialist from the University of Texas, but confirmed his view that Modern Land was correctly decided and that in his view Professor Westbrook’s views were unpersuasive. 120. Accordingly, Judge Gropper has strongly reiterated his opinion and the analysis of the applicable law that I applied for the purpose of the convening hearing remains unaffected. Furthermore, the very substantial vote in favour of the Scheme by Noteholders and the 53 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 FSD2022-0165 Page 53 of 55 2022-11-17 complete absence of any opposition to the Scheme means that, applying the test I set out in Freeman FinTech, it must be right to conclude that the risk of a successful challenge to the effectiveness is very low. There is a risk that the very small percentage of Noteholders who did not vote in favour of the Scheme could, even assuming that the New York Bankruptcy Judge grants the relief sought under chapter 15, seek to take action in Hong Kong but it is far from clear that they would be entitled to do so as a matter of law or that any action would prevent the Scheme being implemented. In any event, there is no evidence that any such Noteholders are considering or would wish to do so. 121. There is of course the risk that New York Bankruptcy Judge will decline to grant the relief sought by the Company. It is a condition to the effectiveness of the Scheme that such relief is granted. I was told at the sanction hearing that the Company’s chapter 15 petition is due to be heard by The Honorable John P. Mastando III on Monday (14 November). It will, obviously, be a matter for Judge Mastando. The Company pointed out at the sanction hearing that this condition is one that it is permitted to waive and that should the relief it seeks not be granted it will need to consider its position and whether to waive the condition. This would be a possibility in this case in view of the very high level of support that the Scheme has obtained. Of course, in this event, the Company has the ability under the Scheme to apply for directions from this Court (see clause 19 of the Scheme). As I noted in Re China Agrotech [2019 2 CILR 356] at [35] the Court has the power to sanction a scheme subject to the satisfaction of conditions to implementation which are unsatisfied at the hearing date (following the reasoning of Henderson, J. in Lombard Medical [2014] EWHC 2457 (Ch)) and will do so where those conditions can reasonably be expected to be satisfied within a reasonably short time. I was satisfied in the present case that it was reasonably likely that the chapter 15 petition would be granted and in any event that since it was due to be heard very shortly after the sanction hearing any difficulties would emerge and could be dealt with promptly; that the conditions that needed to be satisfied in order to allow the Restructuring Effective Date to occur were administrative or otherwise likely to occur and that the amended Longstop Date was in the near future and reasonable in the circumstances. 54 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 FSD2022-0165 Page 54 of 55 2022-11-17 122. I have also considered, in the context of the exercise of my discretion to sanction the Scheme, whether there are any grounds for concluding that the use of a Cayman scheme in the present case represents an abuse of process or improper forum shopping, having regard in particular to the fact that the debt subject to the Scheme is governed by New York law and the Company’s strong connections with Hong Kong and the PRC. I note that no Scheme Creditor has raised any objection to a Scheme being promoted in this jurisdiction; in fact the position is the reverse. Virtually all the Noteholders have supported and voted in favour of the Scheme. In those circumstances, and generally in the circumstances of this case, it seems to me that the application for a scheme in this jurisdiction was proper and justifiable. I must say that I sometimes have a concern that when courts seek to be overly prescriptive as to when and whether it is legitimate for foreign courts to exercise jurisdiction in respect of cross-border restructuring or insolvency proceedings they do so without regard to whether creditors have objections. It seems to me that we need to adopt a flexible approach that gives companies the opportunity properly to make use of procedures in jurisdictions with which they have a sufficient and appropriate connection, where that is done in the interests of and with the support of creditors and adopt a case by case and fact sensitive basis that involves the rejection of attempts by companies to use foreign proceedings which harm or are objected to by creditors but not to intervene where they do not. _____________________________________ The Hon. Mr Justice Segal Judge of the Grand Court, Cayman Islands 17 November 2022 55 221117- In the Matter of E-House (China) Enterprise Holdings Limited – FSD 165 of 2022(NSJ) – Convening Order and Sanction Order Judgment FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17 FSD2022-0165 Page 55 of 55 2022-11-17